Wheels in motion for new Asian investment bank

BEIJING -- China has begun the practical work to establish an Asian Infrastructure Investment Bank (AIIB) that would offer financial support to boost regional infrastructure, said China's Finance Minister on Friday.

"China has just established the Working Group for the AIIB preparation in a bid to accelerate the process," said Lou Jiwei in an exclusive interview with Xinhua News Agency on Friday.

With a preliminary capital scale of $50 billion, the new multilateral institution is expected to be funded by its members.

According to Lou, the first multilateral consultation meeting on establishing the AIIB ended on Jan. 24 and saw discussion of the framework plan for the bank. Some participating countries declared their intention of being the AIIB's founding members. Bilateral discussions are under way.

"China welcomes more countries to join the AIIB as founding members and hopes that an inter-governmental memorandum of understanding (MOU) on establishing the bank can be signed in the coming fall," he said.

Immediately after the MOU is signed, member countries of the AIIB will start negotiation on legal documents about the bank, so as to put it into real operation as early as possible, the minister added.

The creation of the bank was put forward by Chinese leaders, including Chinese President Xi Jinping and Premier Li Keqiang, during their visits to southeastern Asian countries in October 2013.

Asia's economy has been growing relatively fast with deepening regional economic and trade cooperation, but it is also facing many challenges, especially as new markets and developing countries are suffering from backward infrastructure, Lou noted.

Funds in the current multilateral development banks are limited and saving rates are relatively high in many countries in Asia, so it is necessary to consider establishing a new regional platform for investment and fund-raising to channel more funds into infrastructure, he said.

According to Lou, the AIIB will be a multilateral development institution in Asia and simulate other Multilateral Development Banks (MDBs) in operational modalities and principles.

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