A growing membership of a Chinese-led Asian development bank means that each member state of the Asian Infrastructure Investment Bank would have smaller stakes than originally expected, China's foreign ministry said Wednesday, implicitly admitting that China proposed to relinquish veto power at the new bank.

The Wall Street Journal reported this week that China has proposed to forgo veto power at the AIIB to attract more countries to join the new bank, viewed by many experts as a counterbalance to the Asian Development Bank and the World Bank, which have been dominated by the United States and other Western economies.

When asked to confirm the media report, Chinese foreign ministry spokeswoman Hua Chunying told reporters, "The growing membership of the AIIB means that the stakes held by each member state will be decreased."

"Therefore it is a false proposition to say that China would seek to relinquish its veto right," Hua said.

"The AIIB is a mutually beneficial initiative and compliments the existing international economic order," Hua said, describing the new bank as a "brand-new multilateral development institution."

A South Korean diplomatic source with direct knowledge of the matter said earlier this week that Seoul has decided to join the AIIB and is expected to announce the decision soon, despite U.S. concerns over the new multilateral lender in Asia.

China set the end of March as the deadline for all interested countries to join the AIIB as founding members.

The AIIB has recently gained traction as major Western economies, including Britain, Germany and France, decided to join.

China had initially offered $50 billion and seeks a reported stake of up to 50 percent in the AIIB, which South Korea views negatively because China could make unilateral decisions in the bank's operations.

Details of the AIIB are still sketchy, but the source said European countries would have a combined 25 percent stake in the bank. (Yonhap)