SKorea firms set to benefit after AIIB membership
Print Edition
SOUTH Korea hopes its infrastructure companies will benefit from the country joining the China-led Asian Infrastructure Investment Bank, its finance ministry said yesterday.
Shares in some South Korean iron and steel products makers rose sharply, partly on hopes of new orders when the AIIB is operational and funding infrastructure projects, which is likely to be next year. Histeel Co rose 14.8 percent and Hanil Iron & Steel was up about 6 percent by the afternoon.
“The government expects our companies to win many orders in areas such as communications, energy and transportation, where they have strength,” Song In-chang, head of the finance ministry’s international finance bureau, told reporters.
On Thursday, Seoul said it would seek to join the AIIB as a founding member, the latest US ally to do so despite Washington’s misgivings. China is South Korea’s biggest trading partner and the two countries are set to sign a free trade agreement in the first half of this year.
China has set March 31 as the deadline for joining the bank as a founder member, which will be capitalized at an initial US$50 billion to provide project loans to developing nations.
China’s finance ministry said yesterday that Luxembourg had been accepted as a founding member, taking the number to 28. According to Seoul, applications from six countries are pending — from Britain, Germany, France, Italy, Switzerland and South Korea.
The AIIB is seen as a significant and possibly historic setback to US efforts to extend influence in the Asia-Pacific region.
The major absentees in the region from the bank are Australia and Japan. Australia has said it is close to joining, but Japan remains cautious.
“What is important is not the date but whether we can see what we have been asking guaranteed,” Taro Aso, the Japanese finance minister, told reporters yesterday.
Motoshige Itoh, an economics professor at the University of Tokyo and a member of a Japanese government think tank, told Shanghai Daily in an e-mail that Japan will follow the US as it values its relationship with Washington.
“Japan still needs time to judge how the AIIB functions as a global organization and to what extent it could take its responsibility,” Itoh wrote, adding that the US was doing the same.
Aso said at a news briefing in Tokyo on Tuesday that it plans to make a final decision by the end of June.
On the same day, the Asian Development Bank, the existing regional bank led by Japan, said it was ready to collaborate with the AIIB if it meets environmental, social and other standards for lending.
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