The United Kingdom has applied to become a founding member of the Asian Infrastructure Investment Bank (AIIB), a Chinese-backed development bank, drawing rare public criticism from the United States. The UK is the first major Western economy to seek membership in the institution, which was established in October by 21 countries led by China to fund infrastructure projects in Asia.
A spokesperson for Prime Minister David Cameron defended the decision, stating that it was in the UK's national interest and that the government would demand the bank adhere to strict banking and oversight procedures. Chancellor George Osborne said joining at the founding stage would create "an unrivalled opportunity for the UK and Asia to invest and grow together."
The US has expressed concerns about the bank's commitment to international standards on governance. National Security Council spokesman Patrick Ventrell said, "We have concerns about whether the AIIB will meet these high standards, particularly related to governance, and environmental and social safeguards." The US has reportedly urged allies such as Australia, South Korea, and Japan to stay out of the bank.
Pippa Malmgren, a former economic advisor to US President George W. Bush, told the BBC that the public chastisement from the US indicated the move might have come as a surprise. However, Mr Cameron's spokesperson said Chancellor Osborne discussed the measure with his US counterpart before the announcement.
The World Bank's president, Jim Yong Kim, welcomed the AIIB, saying, "From the perspective simply of the need for more infrastructure spending, there's no doubt that from our perspective, we welcome the entry of the Asian Infrastructure Investment Bank." The founding members have agreed that capital structure will be based on relative GDP, which could give China a 67% shareholding.
