South Korea joins China-led development bank

[SEOUL] South Korea announced on Thursday it was joining the Chinese-backed Asian Infrastructure Investment Bank (AIIB), despite US opposition to the new multinational lender which Washington sees as a threat to the World Bank.

Joining the AIIB as a founder member would strengthen South Korea's influence in the international banking sector and help domestic firms participate in large-scale regional infrastructure projects, a finance ministry statement said.

The question of joining the bank had posed something of a quandary for Seoul, which had to balance competing pressure from its main military ally, the United States, and its largest trading partner, China.

The ministry said the decision to sign up as a founder member came after China had addressed a number of outstanding governance issues regarding the new lender.

China touts the US$50 billion institution as a tool for financing regional development alongside other lenders such as the US-based World Bank and the Japan-led, Manila-based Asian Development Bank.

President Barack Obama's administration has been waging an intense but low-profile lobbying campaign against the new bank, with officials suggesting it would lower international development standards.

AFP