Japan Mulling Decision to Join China Led Investment Bank

Japan has told China that it is reluctant to accept an invitation to be one of the founding members of a new infrastructure investment bank Beijing aims to create in Asia as early as this autumn, Japanese government sources said Saturday.

Tokyo’s stance on the envisioned China-led “Asia Infrastructure Investment Bank,” which became clear for the first time, may affect the decisions of other countries on how to respond to Beijing’s ambition to expand its influence in the Asia-Pacific region.

With the United States warning against China’s growing regional assertiveness, Japan’s Prime Minister Shinzo Abe might urge his Australian counterpart Tony Abbott not to take part in the AIIB during their planned summit talks next Tuesday, the sources said.

At a meeting in Tokyo last month, Jin Liqun, head of the working group to establish the AIIB, asked Japan’s then top finance diplomat Mitsuhiro Furusawa to provide capital to the project to help improve infrastructure in developing Asian economies, the sources said.

But Furusawa, the vice finance minister for international affairs, told Jin that Tokyo is “not convinced” by Beijing’s current plan to set up the AIIB, doubting the necessity of it given that the Asia Development Bank already exists, they said.

Jin requested Furusawa to continue talks on the matter, saying the AIIB would be launched even if Japan does not sponsor it, they added.

One of the sources said, “The ADB has worked well so far. There is skepticism about whether we need to create a new (international) body.”

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza