Canberra set to sign for China-led bank
The Australian
October 13, 2014 12:00AM
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AUSTRALIA is close to joining a Chinese government plan to create a $50 billion infrastructure bank despite US objections about the way the cash could be used to extend China’s power throughout Asia.
In a test of regional loyalties, the Abbott government is likely to back the fund next month, complementing a wider agenda at the G20 summit in Brisbane to use mammoth infrastructure spending to lift the global economy.
The Australian has been told the commitment to the Asia Infrastructure Investment Bank is subject to checks on its governance and leadership, similar to concerns expressed by others about voting rights for those who sign up.
An agreement would tighten links between Canberra and Beijing just as ministers enter final talks on a free-trade agreement that could dramatically expand two-way trade already worth more than $150bn a year.
In a sign of Australian concern about Beijing’s actions, Joe Hockey used a closed session of the International Monetary Fund on Saturday to warn against China’s surprise decision last week to impose tariffs on coal imports.
The deal on China’s new bank would deliver hard financial commitments to match the talk from economic leaders in recent days at the G20, the IMF and the World Bank, where many have called for urgent steps to spur growth.
But there are deep tensions around the Chinese plan, with the The New York Times reporting US officials were pressing Australia and South Korea to spurn the new bank because it would undermine the World Bank and the Asian Development Bank, both set up with support from the US and Japan. The US saw the AIIB as a “soft-power” exercise that would draw Asian countries closer to Beijing’s orbit, the report said.
There were doubts yesterday about the scale of US concern, however, with one source saying the Treasury was not alarmed.
Australia and South Korea are said to be working together on *issues around the governance and leadership of the AIIB.
Chinese president Xi Jinping is expected to formally announce the bank when he hosts the Asia- Pacific Economic Co-operation meeting on November 10 and 11.
That could see Tony Abbott signing up to the AIIB in Beijing a few days before he hosts Mr Xi and other leaders at the G20 summit in Brisbane on November 15 and 16.
One source said there was a “reasonable chance” Australia would sign. A second source said he thought the federal government had decided to back the plan.
Why the US Is Trying to Squash China's New Development Bank
The U.S. has been lobbying Asian nations to persuade them to reject China’s Asian Infrastructure Investment Bank.
