Even as Washington remains steadfast in its opposition to the new lender, Australia on Wednesday announced it will be investing 930 million AU dollars ($718 million) as paid-in capital to the Asian Infrastructure Investment Bank, led by China.
In a joint statement, Australian Minister for Foreign Affairs and Trade Julie Bishop and Treasurer Joe Hockey said the decision to join the AIIB comes after “extensive discussions between the government, China and other key partners around the world”.
The US has tried to sway its allies from joining the new lender on the grounds of “governance issues” although it is also wary the new financial instrument could be used to expand China’s economic clout.
US and Japan are yet to participate in the new financial institution.
The AIIB will have paid-in capital of $20 billion with a total authorized capital of $100 billion, which would be financed by individual country contributions proportionate to their economic size.
The bank will feature a three-level management structure that includes a board of governors, board of directors and senior management, China’s Deputy Finance Minister Shi Yaobin said earlier.
The Articles of Agreement for the new bank have been finalised and will be signed in Beijing on Monday June 29.
Earlier last month in Singapore, representatives from 57 prospective founding members of the AIIB and Jin Liqun, Secretary General of the Multilateral Interim Secretariat on establishing the AIIB attended the final negotiations that discussed shareholding in the bank.
Australia will be the sixth largest shareholder, said a government statement on Wednesday.
The statement noted that there is an estimated infrastructure financing gap of around $8 trillion in the Asian region over the current decade. “The AIIB will be part of the solution to closing this gap,” it said.
The new lender is seen by the US as posing a challenge to the establishments controlled by Washington, such as the World Bank.
China is also a major player in the New Development Bank being set up by the BRICS nations and is also providing $40bn for the new Silk Road Fund to improve connectivity across Asia.