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AIIB good for region, good for the world

By Mike Bastin (China Daily) Updated: 2014-11-04 08:16

The memorandum of understanding signed by China and 20 other Asian economies agreeing to establish an Asian Infrastructure Investment Bank has attracted much comment.

Clari on calls for explanation and justification from the United States, its allies in the Asian region and voices at the World Bank have overshadowed this exciting and momentous development.

Yet the rationale behind the bank's formation is clear: focused, market-driven investment that will support Asian countries' infrastructure construction to propel economic growth.

While the focus is on Asia and developing Asian economies, investment and economic opportunities and involvement from far out side the region are extremely welcome.

The thinking behind the AIIB is not just centered on Asian economic growth but also Asian integration with the world economy and the emergence of a symbiotic relation ship between the countries of East and West.

Indeed, Wei Jianguo, vice-chairman and secretary-general of the China Center for International Economic Exchange, declared at the Boao Forum for Asia that the bank is an open and inclusive plat form that welcomes not just nations from Asia but others as well, including the US and European countries.

Such a public comment is not often associated with the World Bank or the Asian Development Bank.

Initial seed capital of $100 billion is planned, with the AIIB set to star to perations in early 2015. But only $50 billion of this start up capital will be provided by the Chinese government.

At least another $50 billion from financial institutions and private capital is being welcomed, and not necessarily from the Asian region. It is a perfect opportunity for European nations and their financial service industries.

The fact that China has initiated such a regionally focused, infrastructure driven investment entity, with the nation's superlative record of dramatic infrastructure trans formation that has been marveled world over and demonstrated considerable commitment, should be welcomed.

It demonstrates a far more market-focused approach to the needs of Asian economic development. In particular, the call for private capital is to be applauded. It is often only a public private investment partnership that lies behind an accelerated and sustainable growth model.

AIIB good for region, good for the world

AIIB good for region, good for the world

 Asian Infrastructure Investment Bank will guide capital  ADB to work together with China-proposed AIIB

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