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Interview: Establishment of AIIB triggers Japan's 110-bln-USD investment into ADB for infrastructure: Australian academic

Xinhua, May 27, 2015 Adjust font size:

Japan's 110-billion U.S. dollars investment into the Asian Development Bank (ADB) announced last Thursday was triggered by the establishment of the China-proposed Asian Infrastructure Investment Bank (AIIB), a leading Australian academic has said.

In a recent telephone interview with Xinhua, Deputy Director of the China Relations Institute Professor James Laurenceson said Japan's further investment into the ADB would not happen if it were not for the AIIB.

"It means that the AIIB is actually achieving one of its goals which is to increase funds for infrastructure investment." Laurenceson said.

"That is why even if the AIIB only provides some gentle competition to the existing players, the region itself is going to be better off," he added.

For many countries of the region, Laurenceson said what China is proposing is more genuinely win-win than anything they have seen to date, which countries in the region are going to want to support on top of the ADB.

"There is nothing wrong with the existing players for countries in the region to maintain the ADB," Laurenceson said. "These are institutions that can quite happily work together. It's in (the regions) best interests, it's in their own national interests to support the AIIB."

Laurenceson said that while people talk about the competition between the two banks, the reality is the demand for finance is so great, and in practical terms competition will be limited.

"The ADB says currently, on their numbers, they only provide 1. 5 percent of the total demand for infrastructure funds," Laurenceson said. "Even with the AIIB, with this extra capital going into the Asia Development Bank, the demand for funds is still going to be far greater."

Laurenceson said the AIIB isn't going to take offense if the ADB gives a loan to a developing country in the region, negating any potential geopolitical conflict. Endi