Australia to be among largest shareholders in China-led bank

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CANBERRA, Australia (AP) — Australia announced on Wednesday it will become a founding member of a Chinese-led Asian regional bank and its sixth largest shareholder.

Joining the Asian Infrastructure Investment Bank presented Australia with great opportunities to work with its neighbors and largest export market, China, to drive economic growth and jobs, Foreign Minister Julie Bishop and Treasurer Joe Hockey said in a joint statement.

“It provides massive new opportunities for Australia to join with 56 other countries as founding members in building the essential infrastructure for Asia, which will facilitate more trade in agriculture, in resources and ultimately in services that will be to the great benefit of everyday Australians,” Hockey later told Parliament.

Hockey will attend the Articles of Agreement signing ceremony in Beijing next week next. The bank is expected to be operating by the end of the year.

Australia will contribute around 930 million Australian dollars ($720 million) to the AIIB over five years and will be the sixth largest shareholder, the statement said.

“The governance of the AIIB will be based on best practice, ensuring that all members will be directly involved in the direction and decision-making of the bank in an open and transparent manner,” it said.

The bank is intended to finance investments in railways, cargo ports and other trade links. Beijing has pledged to put up most of its initial $50 billion in capital and says that total will rise to $100 billion.

The U.S. government had objected that the bank would undercut existing institutions such as the World Bank and might allow looser lending standards.

The Chinese finance minister, Lou Jiwei, tried to ease such concern in March by saying in comments reported by the official Xinhua News Agency that the bank would reinforce established institutions and “vigorously push forward the global economy.”

Negotiators from 57 governments including Australia completed work on the bank’s charter last month.