Izumi Nakagawa and Manoj Kumar Tokyo and New Delhi
CHINA could have outsized influence over a new Beijing-backed international development bank under a proposed shareholding structure likely to be discussed at a meeting of member countries in Washington this week, sources said.
The group would meet on the sidelines of the annual meetings of the International Monetary Fund and World Bank, said an Indian government official familiar with the plan. India was one of the first countries to join the new bank.
China has proposed that Asian countries own three-quarters of the Asian Infrastructure Investment Bank (AIIB), a larger overall stake than would be warranted were ownership decided by economic weightings alone, given European heavyweights Germany, France, Britain and Italy are also members.
Each Asian member would be allotted a share of that 75 percent quota based on economic size, two Japanese sources said – a formula that would guarantee China the largest single voice inside the bank.
Non-committal
China had outlined details of the bank to Japan in an effort to get Tokyo to sign up, the sources said. However, Tokyo remains non-committal due to its close relationship with the US, which has urged countries to be wary of the AIIB.
“Looking at GDP (gross domestic product) based contributions, if the number one and number three (the US and Japan) aren’t in, then China will have an overwhelmingly large quota and voice,” one Japanese official said.
“No country would be able to challenge China. If Japan were in, it would have considerable influence.”
China’s finance ministry did not immediately respond to a request for comment.
The US had earlier cautioned countries about joining the bank, citing what it called a lack of transparency and doubts about lending and environmental safeguards, and how much influence Beijing would wield. But its major allies – Britain, France, Germany, Australia and South Korea – signed up anyway.
Jin Liqun, the secretary-general of China’s interim secretariat – which is establishing the AIIB, said in Singapore on Saturday that although China would have the biggest share in the bank, it would not dominate its operations.
The Brics nations – Brazil, Russia, India, China and South Africa – would also hold a meeting in Washington this week to iron out details of another international development bank, the $100 billion (R1.1 trillion) Brics bank launched last year, officials said. – Reuters