updated - October 26, 2020 Monday EDT
Australia has pledged to join a China-initiated lender seen as a counterweight to rival the World Bank, putting in $718 million in the bank over five years to make it the sixth biggest shareholder.
Australia's Treasurer Joe Hockey said the Asian Infrastructure Investment Bank (AIIB) provides the country with great opportunities to work with its neighbors and China to further support growth in the region. He is scheduled to attend the signing ceremony for the bank's members in Beijing on June 29.
As late as March, Australia was still hesitant to join the AIIB saying it has issues with the lender's proposed design, governance and transparency. With the announcement, the AIIB appears to have effectively addressed those concerns.
The AIIB was launched by China last year to help finance important infrastructure such as roads, bridges, port facilities among others in the region. It has an authorized capital of $100 billion of which $20 billion have been paid-up.
Fifty seven countries have signed up to become members including the U.K, France and German, but the U.S. and Japan, China's top trading partners, have not. The two are currently embroiled in political disputes with China for its expanding presence in the Pacific.
The U.S has been particularly vocal against allies joining the bank despite acknowledging a need for another multilateral institution to support the World Bank, where the U.S. has substantial clout, in financing needed infrastructure worldwide.
The U.S. raised concerns that the AIIB's governance standards may not be up to par with that of leading institutions, but other governments said being members allow them to have a say on this matter. The U.S. is also seen to be wary of the AIIB's being used by China as a tool to advance its interest in Asia, where it is recently paying closer attention with China's rise.
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