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Taiwan, Russia Join China's New Development Bank

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Taiwan's Premier Mao Chi-kuo speaks to the foreign media about Taiwan's interest in joining the Asian Infrastructure Investment Bank (AIIB) in Taipei, Taiwan.
Taiwan's Premier Mao Chi-kuo speaks to the foreign media about Taiwan's interest in joining the Asian Infrastructure Investment Bank (AIIB) in Taipei, Taiwan.

From VOA Learning English, this is the Economics Report.

More than 40 countries, including Russia and Taiwan, have agreed to be founding members of China's proposed Asian Infrastructure Investment Bank. However, two of the world's largest economies, the United States and Japan, have held off at this time.

China proposed the bank last October as a way to finance roads, bridges, ports and other needed infrastructure projects in Asia. The time limit for joining as a founding member was March 31.

In only a few months, the number of countries seeking membership nearly doubled. They came from Africa, Europe, South America, Asia and the Pacific. Some European powers added themselves to the list. They include Britain, Germany, France and Italy. Other important economies include South Korea, Australia and Russia.

Taiwan also sought to become a founding member. But it is not clear how China will react. Taiwan and China do not have diplomatic ties. But, relations have improved since the election of President Ma Ying-jeou in 2008. The two sides also are working on details of a trade agreement. However, popular opposition in Taiwan to mainland China's increased influence on the island remains very strong.

The U.S. and Japan have said they are concerned about the governance of the Asian Infrastructure Investment Bank, or AIIB. The United States has urged countries to consider details about the bank's governance and standards -- its social and environmental policy -- before joining. Critics say the AIIB threatens the work of existing development banks such as the World Bank, the International Monetary Fund and the Asian Development Bank.

Yet, the Asian Development Bank itself noted in a recent report that the need for infrastructure projects in Asia is great. The institution, led by the U.S. and Japan, estimated last May that the Asia Pacific area needed $800 billion each year in infrastructure development.

Experts are watching to see how China will take its leadership role in the new bank. The AIIB is expected to start with $100 billion in capital, mostly from China. Some experts point to the high interest in membership. Shi Yinhong is a political scientist at Renmin University in Beijing. He says China's leading part in the bank comes with benefits and costs.

In other words, while China has gained from the effort to develop the AIIB, it will also have to satisfy other bank members and multi-national institutions. Officials at the World Bank, International Monetary Fund and Asian Development Bank say they are looking for ways to cooperate with the AIIB.

And that's the Economics Report. I'm Mario Ritter.

This story is based on reports from VOA's Bill Ide in Beijing. Mario Ritter wrote it for VOA Learning English. Hai Do was the editor.

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Words in This Story

role – n. a part that someone or something has in a particular activity or situation

influence – n. the power to change or affect someone or something: the power to cause changes without directly forcing them to happen

social – adj. of or relating to people or society in general

Share with us your thoughts about the growth of interest in the Asian Infrastructure Investment Bank. Write us in the comments section below.

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