The UK who had last week suddenly announced its decision to join the new Asian Infrastructure Investment Bank (AIIB) has inspired other European countries to follow suit. France, Germany and Italy have just announced their intention to join the new Chinese-led international bank. Even Australia, who had just last November strongly rejected any intention to join the bank, has now said that it is reconsidering its position. China’s state-owned Xinhua news agency has also reported that other nations such as South Korea, Luxembourg and Switzerland were considering joining the new bank.
The AIIB was set up by Chinese President Xi Jinping last year to provide lending for infrastructure development in Asia. The new bank, which is seen as a rival to the World Bank and the Asian Development Bank, seeks to give borrowers more options and to provide a more streamlined borrowing process. However, concerns that the new bank will not have the high standards of governance and inbuilt environmental safeguards have led the US to persuade its allies to not join the AIIB.