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China goes ahead with mega bank

Beijing: China has begun preparations to set up a multilateral development bank (MDB) to fund infrastructure projects in Asia, the finance ministry said, looking to tap into demand for infrastructure growth as regional economies develop.

The planned Asian Infrastructure Investment Bank would have a capital of $50 billion (Dh183.6 billion), paid for by its members.

It would have a mandate to fund infrastructure projects in the region, complementing the work of other such entities, such as the Asian Development Bank. “The AIIB will mainly focus on infrastructure construction in Asia to promote regional connectivity and economic co-operation,” the statement quoted finance minister Lou Jiwei as saying.

“Existing MDBs, such as the World Bank and the Asian Development Bank, put their priorities more on poverty reduction.”

Lou said in the statement that the first multilateral meeting on the bank ended on January 24, with some countries saying they would become founder members. The statement did not name the countries.

Funds in the existing MDBs are limited and savings rates are high in many countries in Asia, so it is necessary to consider establishing a new regional platform to channel more funds into infrastructure, Lou said.