Options Wonderland

[3xBuBu]

France, Germany and Italy Say They’ll Join China-Led Bank

In a challenge to the American-led world financial order, some of the United States’ crucial European allies said on Tuesday that they would join a new development bank for Asia that is largely funded by China and that Washington views as a rival to the World Bank.

The three nations are following the lead of Prime Minister David Cameron’s Conservative-led government in Britain, which last week announced its own decision to join.

The bank was initially proposed by President Xi Jinping of China with a mission of helping to fund infrastructure projects in poor Asian countries, something the World Bank and Asian Development Bank already do. China has pledged a large part of the initial $50 billion of capital, and Beijing hopes the institution will contribute to the expansion of its power base in Asia, even as its growing might, economic and military, reshapes the political dynamics of the region.

Washington had been lobbying against the participation of its allies, fearing that the rise of the Chinese-led lender would erode the institutions, such as the World Bank and International Monetary Fund, that were created to shepherd the world economy after World War II under American leadership.

Before the announcement on Tuesday, the bank had more than 25 members, almost all from developing countries in Asia and the Middle East. Australia, Japan and South Korea have so far refused to join, but the entry of influential European countries could encourage other allies to join, analysts have said.

http://www.nytimes.com/2015/03/18/business/france-germany-and-italy-join-asian-infrastructure-investment-bank.html