South Korea invited to join in establishing bank

Updated: 2014-07-05 06:56

By Wu Jiao in Seoul and Yao Jing in Beijing (China Daily)

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China welcomes South Korea's participation in the establishment of the Asian Infrastructure Investment Bank, President Xi Jinping said in Seoul on Friday.

"Companies in the two countries may engage in discussions in formulating international standards, exploring the international market and joining in the regional integration process," he said at the China-Korea Economic Forum.

Chinese leaders put forward the idea of establishing the regional bank in October to boost funding for infrastructure projects in Asia.

Experts said South Korea's participation will speed up the establishment of the AIIB, after members of the Association of Southeast Asian Nations voiced their support for the platform.

"One of the major difficulties in pushing greater regional economic connectivity across Asia is fundraising," said Li Xiangyang, director of the Institute of Asia-Pacific Studies at the Chinese Academy of Social Sciences.

"Some participants of the AIIB are limited financially. But South Korea is in good condition in terms of finances and foreign exchange reserves."

Seoul is an active advocate of China's proposal of the Maritime Silk Road, which would revive historic economic links through maritime routes in Asia. It also responded positively to the Regional Comprehensive Economic Partnership. "These show that South Korea is embracing regional integration," Li said.

Experts said the biggest reason behind China's push for the AIIB, which is being considered a rival to other lenders such as the World Bank and the Asian Development Bank, is to strengthen relationships among Asian countries.

The Asian Development Bank estimated that in the next decade, Asian countries will need $8 trillion in infrastructure investment to maintain their current economic growth rates.

The establishment of the AIIB will also create more opportunities for Chinese and South Korean companies to go global.

China has held three rounds of talks with interested Asian countries, and a memo on establishing the bank is due to be signed later this year.

Li Jiabao in Beijing contributed to this story.