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Last year, China proposed creation of a development bank called the Asian Infrastructure Investment Bank. Chinese officials say the institution would help finance infrastructure projects throughout Asia. The area has a need for better roads and other infrastructure, including ports and power supplies. The Asian Development Bank, another organization, was set up to reduce poverty in Asia and the Pacific. It estimated last May that the Asia-Pacific area needs about $800 billion a year in infrastructure development. China reports that more than 20 countries have agreed to be founding members of the Asia Infrastructure Investment Bank, or AIIB. Recently, some European powers added themselves to the list. United States allies Britain, Germany, France and Italy have joined up. South Korea also has joined. And Australia has agreed to move forward with negotiations. The U.S., however, has said it is concerned about the governance of the AIIB. It has urged countries to consider the bank’s standards, social and environmental policies, before joining. Robert Kahn is a senior fellow at the Council on Foreign Relations. He said U.S. officials are concerned that the AIIB may be seeking to replace existing institutions, such as the World Bank and Asian Development Bank. U.S. officials say they welcome new multi-lateral institutions that would observe high standards that the international community has built. China says it will uphold high standards. But most details will not become clear until the new bank is operational.
