Business Irish

Wednesday 23 August 2017

Finance weighs up Ireland joining China-backed bank

China’s President Xi Jinping (centre) poses for a photo with guests at the Asian Infrastructure Investment Bank launch at the Great Hall of the People in Beijing last October
China’s President Xi Jinping (centre) poses for a photo with guests at the Asian Infrastructure Investment Bank launch at the Great Hall of the People in Beijing last October
Colm Kelpie

Colm Kelpie

The Department of Finance is weighing up the possibility of Ireland joining the China-led Asian Infrastructure Investment Bank (AIIB).

Although the deadline to become an influential founding member has passed, officials are preparing briefing material for Finance Minister Michael Noonan on whether it would be appropriate to join the bank, which the US sees as a vehicle for China to exert its economic and strategic muscle in Asia.

Ireland has been one of the European countries that hasn't snubbed the US and become a founding member. The UK announced it was joining last month, along with several other European countries and traditional US allies including France and Germany, rebuking the concerns of the White House.

It is understood that officials in the department are drawing up a briefing note that will be put to the Minister within the coming weeks.

More than 40 countries, including Australia, South Korea and Italy, have said they would sign up to the AIIB, with Japan and the US the two notable absentees.

China set a deadline of the end of March to become a founding member of the AIIB, an institution that could enhance Beijing's regional and global influence.

The US initially tried to dissuade allies from joining the Chinese-led initiative, amid concerns it would serve as a challenge to the World Bank and the Asian Development Bank, over which the US has influence.

But as more and more countries signed up, the US changed its tune, with Treasury Secretary Jack Lew stating that as long as it complements existing institutions and adopts high governance standards, Washington would welcome it.

The AIIB was set up by China last year to spur investment in Asia in transportation, energy, telecommunications and other infrastructure.

Ireland is already a member of the Asian Development Bank (ADP), having joined in 2006.

The ADP announced last month that it believed India would outperform China, the world's second biggest economy, in terms of economic growth this year. It said it believes the Indian economy would grow by 7.8pc this year, compared to China's 7.2pc.

Irish Independent

Also in Business