Indonesia joins China-led regional bank

BEIJING, Nov. 27 (Yonhap) -- China said Thursday that it has signed a memorandum of understanding with Indonesia that allows Jakarta to join a regional bank led by Beijing to fund infrastructure projects in Asia.

South Korea, Australia and Indonesia were absent last month when China and 20 other countries in the region agreed to set up the Asia Infrastructure Investment Bank (AIIB), amid Washington's concerns over the new regional lender seen as a counterweight to established multilateral lenders such as the Asian Development Bank (ADB).

Indonesia's finance ministry signed the preliminary agreement with China in Jakarta on Tuesday, Chinese foreign ministry spokeswoman Hua Chunying told reporters.

Indonesia "believes this AIIB will inject a new momentum to the region's development," Hua said.

"China has been saying that we are ready to work with other members to build the AIIB into a platform of equality and high efficiency so it can better cater to the needs of all sides in this region," Hua said.

Asked whether the headquarters of the AIIB will be located in Jakarta, Hua referred the question to China's finance ministry.

China is pushing to set up the AIIB with an initial capital contribution of US$50 billion as a potential rival to the ADB and the World Bank, dominated by the United States, Japan and Western economic powers, as it seeks to increase its economic clout in Asia.

Details of the AIIB are still sketchy, but the new bank is expected to begin its operations by the end of next year.

kdh@yna.co.kr
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