China has launched the $50 billion Asian Infrastructure Investment Bank (AIIB), seen as a challenge to the World Bank and Asian Development Bank, both multilateral lenders that count Washington and its allies as their biggest financial backers.
China, which is keen to extend its influence in the region, has limited voting power over these existing banks despite being the world’s second-largest economy.
The AIIB, launched in Beijing at a ceremony attended by Chinese finance minister Lou Jiwei and delegates from 21 countries including India, Thailand and Malaysia, aims to give project loans to developing nations. China is set to be its largest shareholder with a stake of up to 50 percent.
Australia, Indonesia and South Korea skipped the launch as the United States said it had concerns about the new rival to Western-dominated multilateral lenders.
The AIIB is expected to begin operations in 2015 with senior Chinese banker Jin Liqun, ex-chairman of investment bank China International Capital Corp, expected to take a leading role.