China aims to break U.S. hold in Asia with rival to World Bank

Beijing diplomats on charm offensive to rally support for new institution free from U.S. control.

China wants to set up a multilateral development bank in Asia to break the U.S.’s financial hold on the continent, the Financial Times reported Tuesday, citing officials familiar with the matter.

It said that Chinese officials have been touring Asia and the Middle East drumming up support for a new institution with $100 billion in capital, with a view to financing major development projects such as infrastructure. The FT said 22 countries across the region have expressed interest so far.

Such an institution would be a direct rival to the World Bank and the Asian Development Bank, which China thinks are too much influenced by the U.S. and its ally, Japan.

The initiative reflects not only China’s ever-growing financial clout, but also its anger at the U.S.’s refusal to implement a 2010 deal allowing it and other emerging nations greater influence in the World Bank and the International Monetary Fund.

The FT said Beijing wants to establish what it calls the Asian Infrastructure Investment Bank by the end of the year–which is also the deadline that the IMF has set Congress for ratifying the 2010 deal.

Full article: China aims to break U.S. hold in Asia with rival to World Bank (Fortune)

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