European ties to bank to aid Asian integration

Economic integration among Asian countries will be accelerated by more European nations joining the Beijing-led Asian Infrastructure Investment Bank, experts say, as four European countries decided to apply for founding membership of the bank on March 17.

Ding Yifan, an economist at the State Council's Development Research Center, says that if more European nations join the AIIB, it will strengthen its fundraising ability and the implementation of more infrastructure projects.

"It seems that the AIIB is being equipped with a stronger financial capability, and its ability to plot big infrastructure projects will increase, promoting regional connectivity, the premise of economic integration," Ding says.

German Finance Minister Wolfgang Schaeuble announced at a joint news conference with visiting Chinese Vice-Premier Ma Kai that Germany, Europe's biggest economy and a major trading partner of Beijing, would be a founding member of the AIIB.

In a joint statement, the foreign and finance ministers of Germany, France and Italy said they would work to ensure the new institution "follows the best standards and practices in terms of governance, safeguards, debt and procurement policies."

President of the European Parliament Martin Schulz welcomed China's initiative of establishing the international bank when he delivered a speech on China-European Union cooperation at the Chinese Academy of Social Sciences in Beijing, saying both China and the EU want to develop more global financial governance.

The joint statement came after the United Kingdom announced that it would join the $50 billion bank.

The UK's new Ambassador to China Barbara Woodward said at her first media news conference at the embassy that she is very "delighted" that her country applied for the founding membership of the bank and she noted that France, Germany and Italy also have made such applications.

"We believe that Asia needs infrastructure construction and we would like to share our experience in this area. Infrastructure investment will benefit economic growth in Asia and also the world," she said.

London hopes to work with Beijing to shape the international financial institution and support the development of infrastructure in Asia, she added.

"The European countries recognized the important role that Asia plays in world economic development and the role infrastructure construction plays in the development in Asia," says Cui Hongjian, director of European studies at the China Institute of International Studies.

"They are very practical. They would not like to lose business opportunities in the region."

Before the four European countries released their decision, the United States warned them to think twice before applying for membership.

Some analysts say it is because Washington is worried the AIIB will weaken the influence of financial institutions including the IMF, World Bank and Asian Development Bank, over which the US wields the most power.

But Woodward said she believes that there is enough space for all international financial institutions working in the region.

Ding says: "It is too early to say if better integration and more interaction among Asian countries will lead to a reshuffle in the region and eventually challenge the United States-dominated international financial system. But it is likely, since changes to the international order have all begun gradually."

Chinese Vice-Minister of Finance Shi Yaobin has said that the AIIB will not challenge the roles of the World Bank or Asian Development Bank, as it will focus on infrastructure renovation in Asian countries rather than poverty reduction.

The AIIB was launched in Beijing last year to spur investment in Asia in transportation, energy, telecommunications and other infrastructure. The application for founding membership will close at the end of March.

Contact the writers at zhouwa@chinadaily.com.cn.