US urged to weigh its role in China-proposed AIIB

BRUSSELS -- The US recognition of the Asian Infrastructure Investment Bank (AIIB) as an additional source of finance for Asia would be helpful to the world economy, a European expert said.

John Farnell, a senior adviser of the Brussels-based think tank, the EU-Asia Center, said in an interview with Xinhua that the United States needs to make a choice whether to contribute actively to this new body.

He said the AIIB will and should co-exist with other existing international institutions, which may not be sufficient to achieve the many investment objectives required for global growth.

Farnell added the AIIB would provide a complement to what have already existed. "This is not a question of winners and losers, it is rather one of parallel efforts to achieve a common goal."

He stated that European countries joining the AIIB sends a signal that a wider range of international financial institutions can be helpful to help solve structural problems in the world economy.

The AIIB initiative was clearly an attempt by China to give more prominence to its international leadership role, he said.

"It will be important, however, for China to demonstrate that its AIIB initiative is not intended to overthrow what has already been achieved in terms of international economic cooperation for development, but rather to add to the resources available and to create new opportunities for international cooperation," he added.

As for the key motive of European countries in joining the AIIB, Farnell said it is to participate actively in an important economic initiative aiming at the development of the most dynamic region in the world economy, at a time when their own economies are looking for sources of demand and stimulus to growth.

The number of European countries ready to join the bank is growing. Britain, France, Germany, Italy, Luxembourg and Switzerland have recently applied to join the AIIB, which already has 27 prospective founding members.

The application deadline for membership is March 31, while the AIIB is expected to be formally established by the end of 2015.

The China-proposed bank, with an expected initial subscribed capital of 50 billion US dollars, will be an international financial institution to fund infrastructure projects in Asia.