Abbott: Australia set to join China-led investment bank

29 Mar10:31 AM

{SYDNEY] Australia is preparing to join China's development bank, becoming the latest US ally to show support for the Asian nation's effort to boost its influence in the region.

Australia is finalizing the process to sign a memorandum of understanding committing the country as one of the founding members of the Asian Infrastructure Investment Bank, Prime Minister Tony Abbott said on Sunday in a joint e-mailed statement with other Cabinet members. His government still has issues to address through continuing consultations, according to the statement.

By lining up the support of more than 30 nations, and securing a pledge of cooperation from the five-decade-old Asian Development Bank, China is building credibility for the AIIB even without US support, as President Xi Jinping expands his nation's influence in Asia.

"We're joining because it is right for Australia," Treasurer Joe Hockey said on Sunday in a Channel Ten interview. "It's right for Australia to be part of a multilateral bank that is going to be providing tens of billions of dollars in loans in our region, to our neighbors." Australia's most important ally, the U.S., has expressed unease with the AIIB because it could weaken the importance of the Asian Development Bank, dominated by Japan and the US.

The UK and Switzerland on Saturday became the latest countries to commit to becoming founding members. Russian President Vladimir Putin approved the nation to join, First Deputy Prime Minister Igor Shuvalov said in speech at the Boao Forum in China on Saturday.

"We should help to make sure it has proper governance principals and that it is actually delivering the infrastructure necessary to grow the economy of the Asian region, which in turn helps us," said Mr Hockey, who issued the statement with the prime minister and Foreign Affairs Minister Julie Bishop.

Key matters to be resolved before Australia considers joining include whether the bank's board of directors will have authority over key investment decisions, and that no one country controls the bank, according to the statement.

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