Japan won't join China-led investment bank as founding member


Posted at Mar 31 2015 01:58 PM | Updated as of Mar 31 2015 09:58 PM

TOKYO -- The Japanese government remained cautious about joining a planned Chinese-led Asian development bank on Tuesday, effectively deciding not to indicate its participation by the deadline China has set for accepting founding members.

"There is no need to participate hastily," Prime Minister Shinzo Abe told a meeting of his Liberal Democratic Party, referring to the proposed Asian Infrastructure Investment Bank, according to a participant of the meeting.

Abe also pointed to such remaining concerns as governance standards and the screening process for providing loans at the institution.

The prime minister added, "The United States now knows that Japan is trustworthy," after Tokyo sided with Washington in keeping its careful stance toward the AIIB, though most of other Group of Seven nations such as Britain and Germany have announced they will take part.

Finance Minister Taro Aso restated his cautiousness, telling a press conference, "We have no choice but to be very cautious about participation" unless the proposed institution clears such conditions as securing fair governance and debt sustainability.

As a condition for Japan's participation in the AIIB, Aso also called for loans to be screened from the standpoint of their environmental and social impact, and for the bank board to approve projects individually.

Their remarks came as more countries moved to announce their intention to join the bank, with the end-of-March deadline looming for filing applications. The number of prospective founding members has reached more than 40.

Foreign Minister Fumio Kishida told reporters that Japan has not obtained a clear explanation from China on its concerns about the proposed bank's governance.

Japan will continue to call on China to provide such explanation in collaboration with other countries "without a specific deadline in mind," Kishida said.

Chinese President Xi Jinping announced last year a project to set up the bank in Beijing with initial capital of around $50 billion, with China planning to be the biggest stakeholder.

The bank will offer loans for construction of infrastructure, such as roads, ports and railways in developing and emerging countries, and is set to be established later this year, according to China.

The United States, Japan and some other countries have been wary about their participation because the initiative is seen as expanding China's global influence and a potential rival to Washington-dominated existing institutions such as the World Bank.

While U.S. officials have expressed wariness over the AIIB, they have also started saying recently that the new bank should work closely with existing institutions to make sure that it has proper lending standards.