China-led bank starts with 57 members, Norway included

No nations that formally sought to become founding members of the Asian Infrastructure Investment Bank (AIIB) are known to have been refused. But Taiwan, the self-governing island that Beijing regards as part of its territory, had its application for founding membership rejected.

The last seven countries approved as founding members by Wednesday’s deadline were named by China’s finance ministry as Sweden, Israel, South Africa, Azerbaijan, Iceland, Portugal and Poland.

The 57 include four of the United Nations Security Council’s permanent five, 14 of the 28 European Union countries, and 21 members of the 34-strong Organisation for Economic Cooperation and Development (OECD).

The line-up does not include the United States or Japan but represents a diplomatic coup for China after close US allies such as Britain, France, Germany and Australia decided to take part even after Washington initially opposed them signing up.

The institution is aimed at financing infrastructure across Asia rather than poverty reduction, and China’s official news agency Xinhua said in a commentary that it offered Western countries “lucrative business opportunities”.

“Welcoming passengers from around the world, an ‘Oriental Express’ train is getting ready to hit the rails toward a destination of common development and win-win cooperation,” it said.

The AIIB would “have a zero-tolerance policy on corruption” and “abide by stringent policies to avoid repeating past mistakes”, Xinhua added.

But critics have expressed concern about its standards and say it could rival the US-led World Bank and the Asian Development Bank, which is headed by Japan.

US Secretary of Commerce Penny Pritzker stressed the importance of such benchmarks to reporters in Shanghai.

“We welcome the AIIB as long as it adheres to the international standards that have been set by the existing multi-lateral organisations like the IMF, the World Bank or the ADB,” she said.

“If operated under those kind of standards, in fact I think there is enormous opportunity for collaboration.”

China has repeatedly said the institution is “open and inclusive”. It approved Norway despite cutting all high-level ties with Oslo after the Nobel Peace Prize went to Liu Xiaobo in 2010.

The Norwegian government has repeatedly maintained that the Nobel Committee is independent and makes its own choices, but Chinese authorities have torpedoed any attempts at normalising relations.

China, since the end of the civil war in 1949, has seen Taiwan as part of its territory awaiting unification and so opposes international recognition for it.

But Beijing has said it would welcome the island joining later “under an appropriate name”.

Shi Yaobin, a vice finance minister who is chairing the negotiations to set up the bank, said in a statement Wednesday that although the founding members had been finalised, the institution would “continue to accept new members in the future”.

The founding members will hold two preparatory meetings in Beijing and Singapore and sign the bank’s articles of agreement by the end of June, he said.

The member states will choose AIIB’s first president after the launch, he said, adding senior executives will be hired in an “open and transparent” manner.