The China-backed Asian Infrastructure Investment Bank (AIIB), viewed by some as a rival to the World Bank and Asian Development Bank, was formally established on Friday, according to a statement issued by Beijing.
The United States and Japan – the world’s largest and third-largest economies, respectively – have notably declined to join the bank, which is expected to begin operations early next year, though others such as Australia, Germany and Britain will take part.
The bank’s establishment came after 17 funding members of the AIIB, which account for just over 50pc of its share capital, ratified an agreement on the bank, state television quoted Finance Minister Lou Jiwei as saying.
“The AIIB is legally established as the Articles of Agreement take effect today,” said Mr Lou said.
“The establishment of the AIIB marks a milestone in the reform of global economic governance system.”
It will be operational once its board of directors and executive council have met for the first time at an opening ceremony scheduled for January 16-18, the ministry of finance said.
Beijing will be by far the largest AIIB shareholder at about 30pc, according to the legal framework signed by 50 founding member countries in late June.
The AIIB has been feted by Beijing as a way of financing regional development, and is seen as a potential rival to US-based institutions such as the World Bank.
The bank will initially focus on financing projects in power, transportation, and urban infrastructure in Asia, the television quoted the bank’s president-elect, Jin Liqun, as saying.
With authorised capital of $100bn, it expects to offer its first batch of project loans by mid 2016, according to the official Xinhua news agency.
First proposed by President Xi Jinping less than two years ago, the bank has become one of China’s biggest foreign policy successes.
Despite the opposition of Washington, major US allies such as Australia, Britain, Germany, Italy, the Philippines and South Korea have joined.
“Forging links between the UK and Asian economies to give our companies the best opportunity to work and invest in the world’s fastest growing markets is a key part of our long-term economic plan,” Mr Osborne said earlier this year.
“Joining the AIIB at the founding stage will create an unrivalled opportunity for the UK and Asia to invest and grow together.”
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