Amid resentment from the western world, China has recently launched Asian infrastructure Investment bank overlooking the fact that Australia, Indonesia, South Korea and Japan remained absent from the inaugural ceremony while United States expressed concerns about the birth of new rival to Western-dominated multilateral lenders and see the $50-billion Asian Infrastructure Investment Bank (AIIB) as a challenge to the World Bank and Asian Development Bank, both of which count Washington and its allies as their biggest financial backers. It may be recalled that China currently being the world second-largest economy has limited voting rights in the existing global financial institutions and the move is aimed at giving project loans to developing nations and may also use the new bank as a tool to extend its influence and soft power in the region.
As per available reports, the AIIB was launched in Beijing at a ceremony attended by Chinese finance minister Lou Jiwei and delegates from 21 countries, including India, Thailand and Malaysia. China is all set to be its largest shareholder with a stake of up to 50%. Japan, China's main rival in Asia and which dominates the $175-billion Asian Development Bank along with the United States, was also not present. Amidst western countries' reservations, the US State Department spokeswoman JenPsaki in a statement quoting Secretary Kerry said that he has already made clear directly to the Chinese as well as to other partners that they welcome the idea of an infrastructure bank for Asia but strongly urged that it meet international standards of governance and transparency.
On the other hand, India Inc welcomed the country's participation in AIIB, saying it will help to leverage badly needed funds for infrastructure development. The moot point is that large economy like India really needs financing badly as it requires over a $1-trillion for infrastructure development, Secretary General, Federation of Indian Chambers of commerce and industry, A didar Singh, said in a recent statement.