Australian leader backs China-proposed bank as long as it is transparent, not run by Beijing

CANBERRA, Australia – Australia's prime minister said Wednesday that he supported the proposed development of a Chinese-backed Asian regional bank as long as it was transparent and not run by a single country.

Prime Minister Tony Abbott said Australia would announce its decision about joining within a few days. He said he expected skeptical countries including the United States and Japan would also join if China gave the required assurances.

The Asian Infrastructure Investment Bank, or AIIB, which is expected to be established by the end of 2015, has raised concerns in Washington that it would compete with established international lenders such as the World Bank and Asian Development Bank. The bank is one of a series of initiatives by Beijing to increase its influence in global finance and economic development.

Abbott said he was having ongoing conservations with President Barak Obama and Japanese Prime Minister Shinzo Abe, both close allies, about the bank. He said Australia would join if it's confident the institution will have transparent governance and clear accountability with decisions made by a multination board.

"What's proposed by China and now joined by many other countries could serve a very useful purpose because we have a massive infrastructure deficit in this country and in our region," Abbott told reporters. "A new multilateral bank to fund infrastructure, particularly in our region, could play a really important part for good in the years and decades to come."

Australia is expected join the bank as early as this week, with Abbott to explain his government's position before a final decision is made, The Australian newspaper reported on Wednesday.

Abbott later told Parliament "we would certainly be prepared to join" the AIIB if Australia's concerns were addressed through discussions with China.

He said that he expected that "under those circumstances all nations, including the United States and Japan would be prepared to join."

China's Finance Minister Lou Jiwei said the AIIB would complement rather than compete with established international lenders, the state-owned Xinhua News Agency reported last week.

Like other regional investment vehicles, such as the Asian Development Bank and the European Bank for Reconstruction and Development, the AIIB would not weaken established institutions, but reinforce them and "more vigorously push forward the global economy," Lou was quoted as saying.

Lou's comments appeared aimed at assuaging U.S. worries after Germany, France and Italy followed Britain in announcing plans to join the AIIB.

Washington has expressed concern that the new bank will allow looser lending standards for transparency, the environment and labor, and undercut the World Bank and International Monetary Fund.

Lou said other countries would be welcome to join even after a March 31 deadline expires.

China proposed the bank in 2013 to finance construction of roads, ports and other infrastructure. It has pledged to put up most of its initial $50 billion in capital. Twenty-one other governments, including India, New Zealand and Thailand, have said they want to join, but the U.S. and close allies Japan, South Korea and Australia have not.