China, 20 other countries initiate new Asian bank

By CHRISTOPHER BODEEN Associated Press

BEIJING (AP) - Twenty-one Asian nations have signed on to a China-driven initiative to create a new development bank for Asia that's aimed at boosting infrastructure investment of all kinds. Beijing sees that as a way to raise its international standing, but Washington opposes the move as an unnecessary and potentially damaging rival to established institutions such as the World Bank.

- WHO'S IN THE GROUP?

Members are overwhelmingly developing nations, with Singapore the only advanced economy. The others range from economic powerhouses India and China to smaller but economically dynamic nations such as Singapore, Vietnam, the Philippines and Mongolia. A few are drawn from among the poorest nations including Laos, Cambodia and Oman.

Others taking part are Uzbekistan, Thailand, Sri Lanka, Qatar, Pakistan, Nepal, Bangladesh, Brunei, Kazakhstan, Kuwait, Malaysia and Myanmar.

Just as important is who's not in the group: Solid American allies Japan, South Korea and Australia, although they, along with the U.S. may enter at a later date if the venture proves to be a success. Although Singapore is a close U.S. ally, its officials say entering now will give them a chance to make a positive impact on the way the bank plans to do business.

- SO WHAT'S WASHINGTON'S VIEW?

The U.S. is concerned that the new bank will introduce laxer standards for lending when it comes to environmental and labor protection, transparency of the project bidding process, and human rights. Washington worries that could undercut existing institutions like the World Bank, the International Monetary Fund and the Asian Development Bank that have sought to impose standards to promote good governance, fair labor practices and a clean environment.

Naturally, Washington is also concerned about any move by China to shift attention away from institutions that it and its allies dominate. The world's first and second biggest economies deeply distrust each other and are locked in a ceaseless competition for pre-eminence in Asia, where the U.S. is the dominant military power but China's massive economy carries enormous heft.

- HOW MUCH CAN IT LEND?

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China, 20 other countries initiate new Asian bank