Support is growing for a new bank promoted by China to provide loans to developing countries.
(Transcript from World News Radio)
China says support is growing for the new bank it's been promoting to provide project loans to developing countries.
And as Darren Mara reports, the proposed bank has received important backing from some key international institutions.
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Countries including China, India and Singapore, signed an agreement in Beijing in October last year to build the the Asian Infrastructure Investment Bank, or AIIB.
The $50 billion fund will provide loans for poorer countries in Asia, to help build energy, transport and telecommunications infrastructure, and for urban and rural development projects.
The United States, worried about China's growing diplomatic clout, has been urging countries to think twice about joining.
China says this hasn't stopped 27 countries now signing up to participate - including key U-S allies like Germany, Britain, France and Italy.
Critics say the AIIB could undermine the work of other international financial institutions.
But the President of the Manila-based Asian Development Bank Takehiko Nakao says he's told the Chinese Finance Minister Lou Jiwei the two banks can work together to benefit the region.
"ADB is happy to welcome the AIIB to finance those financing needs of the region. And Minister Lou Jiwei have discussed that it is to complement, work together with ADB, not to compete with ADB. So I really believe that idea and we can work together to do better things for the region."
And the managing director of the International Monetary Fund managing director Christine Lagarde says she believes there's "massive" room for co-operation on infrastructure financing.
"We really welcome this initiative, which we regard as a perfectly justified and a good attribute of co-operation among international institutions. I wish the IMF could be business of financing infrastructure projects. This is not at all our business. So they cannot be any competition between the AIIB and us. But they will certainly be co-operation and who would be delighted to co-operate with the institution."
The Abbott government is yet to announce whether Australia will join the bank.
However, Cabinet's national security committee has reportedly given the green light for Australia to sign up, and Prime Minister Tony Abbott has said he supports the idea.
"This is a government which takes infrastructure seriously. And we appreciate that other countries take infrastructure seriously and we want to be a good international citizen when it comes to helping not just our country to be prosperous but helping the world to be prosperous."
Foreign Minister Julie Bishop says China has already agreed to address Australia's concerns over governance and accountability policies for the new bank.
"We want to ensure that anything that we invest in meets the very high standards of the kind of multilateral institutions that Australia has supported in the past and so these are matters that we are continuing to discuss with China. A number of our close friends in New Zealand and the United Kingdom have signed up to negotiate with China on this and obviously the more countries that are involved and they're having their concerns addressed then the easier it will be for Australia to have our concerns addressed."
Director of the Washington-based Peterson Institute for International Economics, C. Fred Bergsten, told CCTV it's unfortunate that the US has opposed the formation of the new bank.
"It really implied that the US was unwilling to accept a leadership role for China in the world economy. That's very inconsistent with previous US policy. The United States, for a number of years, has been urging China to take a greater leadership role in the world economy consistent with its greater economic capability."
Despite its initial position, Mr Bergsten believes the United States will eventually join the AIIB.
"It would be very unusual in US history not to participate in a major multilateral institution of this type. It may take a year or two for the United States to find a face-saving way to reverse its position to join the bank. It may even have to wait for our next administration in a couple of years, but I think it will happen."
China says the new bank is set to begin providing loans at the end of the year.