Business
57 countries including India make China-led bank a reality
Beijing, June 29
In a historic move,
representatives of 57 founding countries, including India, signed an
agreement on Monday for the China-led $100 billion multilateral Asian
Infrastructure Investment Bank (AIIB) that paves the way for the bank's
operation later this year.
China, India and Russia are the three
largest shareholders, taking a 30.34 percent, 8.52 percent and 6.66
percent stake, respectively. Their voting shares are calculated at 26.06
percent, 7.5 percent and 5.92 percent, Xinhua reported.
The
signing of the 60-article AIIB agreement is a historic step forward in
building the China-initiated multilateral bank, said Chinese President
Xi Jinping.
"The signing of the document reveals the commitment
of the parties involved in the founding of the AIIB, as well as their
solidarity, cooperation, openness, inclusiveness and quest for common
development," Xi told representatives of the 57 countries.
The
Beijing-headquartered bank will start operation at the end of the year
under two preconditions: at least 10 prospective members sign the
agreement, and the initial subscribed capital is no less than 50 percent
of the authorised capital.
The bank will have authorised capital
of $100 billion and Asian and Oceanian countries will contribute up to
75 percent of the total capital.
Each member will be allocated a share of quota based on their economic size.
With
a principal mission to fund infrastructure projects, the bank will help
meet the massive capital requirements of infrastructure projects worth
trillions of dollars in the Asia-Pacific.
Leaders of the
International Monetary Fund (IMF), World Bank and other leading global
lenders have on many occasions expressed willingness to collaborate with
the new bank to fill Asia's infrastructure gap.
"We view the
AIIB as an important new partner that shares a common goal: ending
extreme poverty. The AIIB will join us and other development banks in
addressing the huge infrastructure needs that are critical to ending
poverty, reducing inequalities, and boosting shared prosperity," World
Bank Group President Jim Yong Kim said in a statement after the signing
ceremony.
The formation of the new multilateral institution
clearly illustrates Asia's great need to improve its underdeveloped
infrastructure as well as the common aspiration of its countries to
explore further growth potential in the region.
"As long as all
parties stick to the spirit of multilateral cooperation, we can make
the AIIB a new platform that features openness, inclusiveness and mutual
benefits, and contribute to Asian infrastructure development,"
President Xi noted.
The new bank strives to follow international
rules in its operation, policymaking and management to ensure efficiency
and transparency.
"We will continue to support existing
multilateral banks, and by proposing the AIIB, we also hope to promote
current institutions to better meet the requirement of their member
countries and global economic system changes," Xi pointed out.
The
China-proposed AIIB aims at solving practical issues of the region, he
said, adding the AIIB will complement current global financial
institutions.
"China will make joint efforts with various
founding countries to build a professional, efficient and clean
multilateral bank, and jointly contribute to Asia and world economic
prosperity," Xi emphasised.
The AIIB was proposed by President Xi in October 2013.
A
year later, 21 Asian nations, including China, India, Malaysia,
Pakistan and Singapore, signed an agreement to establish the bank.
While
stating that the US will not join the AIIB at present, US President
Barack Obama said the country looked forward to collaborating with the
new development bank "just like we do with the Asia Development Bank
(ADB) and with the World Bank" in April.
Statistics from the ADB
show that between 2010 and 2020, around $8 trillion in investment will
be needed in the Asia-Pacific region to improve infrastructure.