Australia to join China-backed infrastructure bank

[SYDNEY] Australia said on Wednesday it will join the new Beijing-led Asian Infrastructure Investment Bank as a founding member, contributing A$930 million (S$963 million) as paid-in capital over five years.

The AIIB, to be based in the Chinese capital, has 57 prospective members, and will have a total paid-in capital of US$20 billion as well as authorised capital of US$100 million, Foreign Minister Julie Bishop and Treasurer Joe Hockey said in a joint statement.

Mr Hockey will seal the agreement in Beijing on Monday.

"The decision comes after extensive discussions between the government, China and other key partners around the world," the ministers said.

"There is an estimated infrastructure financing gap of around US$8 trillion in the Asian region over the current decade. The AIIB will be part of the solution to closing this gap." The AIIB is expected to be operational later this year, but has been shunned by the United States and Japan, the world's largest and third-largest economies.

The bank has been viewed by some as a rival to the World Bank and the Asian Development Bank, two institutions under strong US influence.

There have also been concerns over transparency of the lender, which will fund infrastructure in Asia, as well as worries that Beijing will use it to push its own geopolitical and economic interests as a rising power.

AFP