Tuesday, June 30, 2015

Xi Hosts 56 Nations at Founding of Asian Infrastructure Bank By Jane Perlez

BEIJING — At a ceremony imbued with quiet triumph at the Great Hall of the People, China’s president, Xi Jinping, hosted 56 member countries on Monday for the founding of a Chinese-led infrastructure bank for Asia, including major American allies from Asia and Europe that Washington had counseled not to join the bank. Conspicuously absent from the gathering were the United States and Japan, the leaders of the World Bank and the Asian Development Bank, the institutions that were created after World War II to build a Western-designed global financial architecture. Washington fears those institutions will be undermined by the new body. The country’s powerful treasurer, Joe Hockey, bearing a $700 million contribution that will make Australia the fifth-largest shareholder of the bank, said before the ceremony that the bank offered “great opportunities” for Australia to work with China, its biggest trading partner. Britain, which also joined in defiance of Washington’s wishes, sent Jim O’Neill, commercial secretary to the Treasury. The new bank is the first large international body established by China that, like the World Bank and the Asian Development Bank, meets the standards of the Vienna Convention on the Law of Treaties, legal experts said, and as such could be seen as an effort by China to shoulder more responsibility in underdeveloped parts of Asia, even as some neighbors fear its growing military and territorial claims. Some of the early sour feelings expressed by competitors of the new institution had dissipated by Monday. The president of the World Bank, Jim Yong Kim, said in a statement that he welcomed the newcomer, and the Asian Development Bank offered to join hands to do business. China will be the biggest shareholder in the bank, which aims to have $100 billion in capitalization. Beijing will contribute $29.8 billion, with India a distant second at $8.4 billion, the articles of agreement show. In all, the members range from Western Europe, to Russia, to the Middle East — including Iran and Israel — to the Asia-Pacific region. China, for example, has insisted that the bank be led by a Chinese official, and almost certainly, these people say, the first president will be Jin Liqun, the head of the interim secretariat of the bank and a former deputy finance minister. “The United States always has an American as head of the World Bank, the Europeans always get the head of the I.M.F., and the Japanese head the A.D.B.,” Mr. Dollar said, referring to the International Monetary Fund. “The United States should join at an early date since China is still open to its participation,” said Mr. Xu, head of the economic studies department at the China Center for International Economic Exchanges, a think tank associated with the National Development and Reform Commission, the top state planning body. “We welcome the U.S. to join.” International New York Times Photo-www.aei.org