ADB set to work with new China-led bank, says Chief

MANILA: The head of the Asian Development Bank said Wednesday he is ready to work with China on a new infrastructure investment lender proposed by Beijing, despite fears it could undermine his institution.The Manila-based ADB is too large and established to be threatened by the proposed lender, Takehiko Nakao told a foreign correspondents forum in the Philippines.

"If the AIIB (Asian Infrastructure Investment Bank) is established, we are very happy to have the appropriate collaboration," Nakao said, adding the banks could potentially co-finance projects.

Last month, China and 20 other Asian countries signed a memorandum of understanding to establish the AIIB, an institution whose development has been driven by China and which will be based in Beijing, according to the Chinese state news agency Xinhua.

However the proposed lender is seen as a potential rival to existing Western- and Japanese-dominated institutions such as the World Bank and the ADB.

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The Japanese government has expressed concern, while the United States is reportedly fiercely opposed to the AIIB, which some analysts see as a venue to expand Chinese influence at their expense.

Nakao, who said he had not had any formal contact with Beijing over the proposal, said it was "understandable" that Asian countries would want such an institution because of the region's huge need for infrastructure financing.

He said Asia required $800 billion a year in funding for infrastructure, particularly for energy and ports. Of the 20 countries that signed the AIIB memorandum, only India and Singapore are considered large economies.

However Nakao stressed that the ADB had always been active in infrastructure, even as it also supports social services as part of its mission of poverty-reduction.

"The ADB's focus has always been infrastructure," he said.

"China has always been very supportive of the ADB so Chinese authorities have been saying (the AIIB) will be complementing and supporting the work of the ADB," he added.

Despite its rapid economic growth, China still needed the ADB's help in areas such as environmental protection, he said.

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His bank was also supporting efforts at forging regional cooperation—like China's proposed "maritime silk road", an effort to revive a trade route running from China through Southeast Asia and the Indian Ocean to Europe.

"There is no real issue about it. We can work with the Chinese authorities," he said. – AFP

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