U.S. calls for explanation on China-led regional bank

By Korea Herald
  • Published : Jul 9, 2014 - 21:19
  • Updated : Jul 9, 2014 - 21:19
WASHINGTON (Yonhap) ― The United States said Thursday China should “clearly explain” how a regional development bank it is trying to establish will augment existing institutions in the latest expression of skepticism about the Chinese plan.

China has been working on a plan to set up the Asia Infrastructure Investment Bank as a counterbalance to the Asia Development Bank led by the United States and Japan, and has asked countries in the region, including South Korea, to join the drive.

The U.S. has been negative about the Chinese plan.

“There’s a need for (an) additional public, private and multilateral development bank to support infrastructure development but we also believe any proposal for a new international development, financial institution should clearly explain how it will complement and add value to existing institutions,” State Department spokeswoman Jen Psaki said at a regular press briefing.

She said the ADB is doing the same work the envisioned bank would do.

“Additionally, we believe that any international institution involved in infrastructure investment and development should incorporate high standards of governance, environmental and social safeguards, procurement and debt sustainability that have been established over decades of experience at multilateral development banks,” Psaki said.

“And as you know, there is already the ADB, which plays a critical role in regional infrastructure development, so the AIIB, excuse me, hasn’t ― doesn’t exist yet, and obviously, those are the bar ― that’s the bar we believe it should pass,” she said.

Sydney Seiler, director for Korea at the National Security Council, made a similar remark in an interview with Yonhap on Monday, saying he doubts whether the envisioned bank would add value to existing institutions, such as the ADB and the World Bank.

The U.S. and China were set to open their annual Strategic and Economic Dialogue in Beijing on Wednesday, where the sides are expected to clash over a series of thorny issues, such as territorial disputes in the South China Sea and allegations of Chinese hacking into U.S. businesses.

Psaki said that the strategy talks with China will also focus on the “threat from North Korea.”

“There has been an ongoing dialogue between the United States and China as well as all of our partners in the six-party process about how to best work together to put the necessary pressure on North Korea,” she said. “But the ball remains in their court to take the necessary steps to abide by their international obligations.”