Britain applies to join Chinese-led Asian bank

BEIJING — Britain has become the first major Western government to apply for membership in a proposed Chinese-led Asian regional bank that Washington worries will undercut institutions such as the World Bank.

The British Treasury said Thursday it will join talks this month on the Asian Infrastructure Investment Bank's structure and governance arrangements.

China proposed the bank in 2013 to finance construction of roads and other infrastructure. It has pledged to put up most of its initial $50 billion in capital.

Twenty-one other governments including India, New Zealand and Thailand have said they want to join. For now, the United States and its close allies Japan, South Korea and Australia are not part of the new club.

The bank is one of a series of initiatives by Beijing to increase its influence in global finance and expand trade links with Asian neighbors and developing countries in Africa and Latin America.

Washington has expressed concern the new Asian bank will allow looser lending standards for the environment, labor rights and financial transparency, undercutting the World Bank and International Monetary Fund.

China is the top trading partner for most of its neighbors. They want to promote commercial ties but are uneasy about Beijing's strategic ambitions, especially at a time when it is embroiled in territorial disputes with Japan in the East China Sea and with Vietnam and other Southeast Asian neighbors in the South China Sea.

A Chinese foreign ministry spokesman, Hong Lei, said Beijing welcomed Britain's application to join the bank.

"The bank will be founded on the principle of openness. We welcome all prospective countries to join," said Hong. "It will enable all prospective members to share Asia's growth opportunities."

Speaking in Tokyo, the World Bank president said yesterday his Washington-based institution welcomes the new source of financing for infrastructure developing economies urgently need.

"We welcome the entry of the Asian Infrastructure Investment Bank," said Jim Yong Kim, an American, at the Foreign Correspondents Club of Japan. "We welcome it because of the extraordinary need for infrastructure."

Beijing has tried to soothe security concerns, insisting its initiatives are not aimed at any potential foreign rival.

"The initiatives are not China's solo, but a symphony performed by all relevant countries," said Foreign Minister Wang Yi this week, according to state television.

The British Treasury's announcement said it would try to ensure the Asian bank "embodies the best standards in accountability, transparency and governance."

Joining will help Britain promote commercial ties with Asia, said the British finance minister, George Osborne, in the statement.

"Joining the AIIB at the founding stage will create an unrivalled opportunity for the U.K. and Asia to invest and grow together," said Osborne.

Other member governments include Singapore, Vietnam, the Philippines, Mongolia, Laos, Cambodia, Oman, Uzbekistan, Sri Lanka, Qatar, Pakistan, Nepal, Bangladesh, Brunei, Kazakhstan, Kuwait, Malaysia and Myanmar.

In May, Chinese President Xi Jinping called for the creation of a new Asian structure for security cooperation based on a 24-nation group that excludes the United States.