MercoPress. South Atlantic News Agency

US against China proposal to create a regional development bank for Asia

Xi Jinping want to make the formal announcement at a summit meeting of Asian leaders in November

For almost a year, China has been pitching an idea to its neighbors in Asia: a big, internationally funded bank that would offer quick financing for badly needed transportation, telecommunications and energy projects in underdeveloped countries across the region.

With the public backing of President Xi Jinping and a pledge from Beijing to contribute much of the 50 billion dollars in initial capital, the plan could be seen as an answer to critics who have long argued that China should take on greater responsibilities as a world power. But the United States, perhaps the most vocal of such critics, especially on issues such as climate change and arms proliferation, has not embraced the Chinese proposal.

Instead, in quiet conversations with China’s potential partners, US officials have lobbied against the development bank with unexpected determination and engaged in a vigorous campaign to persuade important allies to shun the project, according to senior United States officials and representatives of other governments involved.

The dispute, the latest manifestation of Chinese-American competition in Asia, could escalate in coming weeks, as Beijing pushes to confirm South Korea and Australia as founding partners of the bank in time for Mr. Xi to formally announce it at a summit meeting of Asian leaders in November. President Obama is scheduled to attend the meeting, and Washington is pressing the two countries to reject the Chinese plan.

Beijing has asked dozens of nations to contribute funds to the bank, which it calls the Asian Infrastructure Investment Bank, and hopes it will become a global institution that rivals the World Bank. To give it broader scope, the Chinese have invited and won the support of some wealthy Middle East nations, including Qatar and Saudi Arabia. But if Washington persuades South Korea and Australia to abstain, it would all but ensure membership in the bank would be limited to smaller countries, depriving it of the prestige and respectability the Chinese seek.

The United States Treasury Department has criticized the bank as a deliberate effort to undercut the World Bank and the Asian Development Bank, international financial institutions established after World War II that are dominated by the United States and Japan, senior South Korean and Australian officials said. Washington also sees the bank as a political tool for China to pull countries in Southeast Asia closer to its orbit, a soft-power play that promises economic benefits while polishing its image among neighbors anxious about its growing force and expansion.