Date
19 November 2017
US assistant secretary of state for East Asian and Pacific Affairs Daniel Russel tells reporters in Seoul last week it is up to individual countries to decide on whether to joining the AIIB. Photo: Reuters
US assistant secretary of state for East Asian and Pacific Affairs Daniel Russel tells reporters in Seoul last week it is up to individual countries to decide on whether to joining the AIIB. Photo: Reuters

S Korea to join China-led Asian infrastructure bank

South Korea said it has decided to seek to be a founding member of the Asian Infrastructure Investment Bank (AIIB), the latest major US ally to do so, Reuters reported.

The finance ministry in Seoul said the AIIB has been promoted to help funnel more investment money into the region while maintaining supplementary relationships with existing multilateral development banks.

“The government will make efforts in close cooperation with the major countries to help the AIIB possess a high level of standards in the areas of responsibility, transparency, governing structure and debt sustainability,” it said.

South Korea has demanded an improvement in the governing structure of the bank and other safeguards, and there has been considerable progress on these issues, the ministry said, without elaborating.

“GDP will be an important factor in deciding each member country’s stake,” it said.

Some prospective members have worried that China’s shareholding in the bank may allow it to exercise veto power.

The Wall Street Journal reported this week that China had proposed to forgo veto power at the AIIB to attract more countries to join the new bank.

Chinese foreign ministry spokeswoman Hua Chunying has, however, dismissed the notion that Beijing sought — or gave up — veto power as an “impossible proposition”.

Twenty-one countries initially signed up as the founding members of the bank, and six others later joined. South Korea and the six other countries have yet to be confirmed as founding members.

The United States had warned against the new institution, but its European allies Britain, France, Germany and Italy announced this month they would join the bank, leading Washington to reassess its stance.

Although Seoul is a major ally of Washington, China is South Korea’s largest trading partner, and the two countries aim to sign a free trade agreement in the first half of this year.

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