March 12, 2015 / 10:33 PM / 5 years ago

UK to join China-backed Asian development bank

LONDON (Reuters) - Britain said it will seek to become a founding member of the Asian Infrastructure Investment Bank (AIIB), a new regional body backed by China that has raised concerns in the United States about governance standards.

File photo of the signing ceremony of the Asian Infrastructure Investment Bank at the Great Hall of the People in Beijing October 24, 2014. REUTERS/Takaki Yajima/Pool

The AIIB was launched in Beijing last year to spur transportation, energy, telecommunication and other investment. Analysts have said it could challenge the Western-dominated World Bank and Asian Development Bank in the region.

However, Britain’s finance ministry said on Thursday that the AIIB could complement work already done in the region by those organizations.

Britain, the first major Western country to apply to become an AIIB member, would meet other founding members this month to agree on the principles of the bank’s governance and accountability arrangements, the ministry said.

Finance minister George Osborne said joining the bank would boost the country’s push to foster business and investment ties with countries in the region, chief among them China.

“Joining the AIIB at the founding stage will create an unrivalled opportunity for the UK and Asia to invest and grow together,” he said in a statement.

Britain’s announcement met with a frosty reception in Washington.

A spokesman for the White House National Security Council said the United States had concerns about whether the AIIB would have sufficiently high standards on governance and environmental and social safeguards.

“It is important to note that countries that become prospective members of the AIIB will be responsible for the standards adopted in the articles of agreement and their implementation,” the spokesman said.

“This is the UK’s sovereign decision. We hope and expect that the UK will use its voice to push for adoption of high standards,” he said.

(This version filed to correct launch venue to Beijing in paragraph 2, not Shanghai)

Writing by William Schomberg; additional reporting by David Chance in Washington; Editing by Cynthia Osterman

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