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Beijing welcomes Britain's move to join China-backed bank

Friday, March 13, 2015 - 18:38

[BEIJING] Beijing on Friday hailed Britain's announcement that it will seek to join a Chinese-led development bank, after Washington voiced caution about the move.

The US$50 billion Asian Infrastructure Investment Bank (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.

Washington, Tokyo, Seoul and others have declined to become founding members - but London on Thursday said it plans to become the first major Western country to join the bank, in a move to bolster relations with China.

"We welcome this decision made by the UK side," Chinese foreign ministry spokesman Hong Lei told reporters at a regular briefing.

He said that "if all goes well", Britain would become a prospective member of the bank by the end of the month.

"The AIIB will complement the existing development banks," Mr Hong said.

He added it "will learn from the good practice of the existing multilateral development banks and meanwhile take a detour from their path so as to reduce costs and increase operational efficiency".

British finance minister George Osborne said on Thursday: "Joining the AIIB at the founding stage will create an unrivalled opportunity for the UK and Asia to invest and grow together."

London's move drew a cautious response from Washington, a rare note of discord in their "special relationship", which follows criticism from the United States about Britain's cuts to defence spending.

China and 20 other countries signed a memorandum of understanding to establish the Beijing-headquartered bank in October.

"We believe any new multilateral institution should incorporate the high standards of the World Bank and the regional development banks," said US National Security Council spokesman Patrick Ventrell.

"Based on many discussions, we have concerns about whether the AIIB will meet these high standards, particularly related to governance, and environmental and social safeguards."

The bank has support from countries including India, Singapore, Malaysia, Cambodia, Pakistan, the Philippines, Uzbekistan and Vietnam.

China's official Xinhua news agency rapped the US for its scepticism, writing in a commentary on Friday that Washington "exhibited nothing but a childish paranoia towards China".

"It seems that the US government needs to be reminded that bias and a deep-rooted strategic distrust towards China are by no means helpful in forging a healthy relationship with the country," Xinhua wrote.

"It's imperative for Washington to change its mind-set," it added.

AFP

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