South Korea becomes the fifth largest shareholder of AIIB.

(Baonghean.vn) - South Korea will contribute $750 million over the next five years to the China-led Asian Infrastructure Investment Bank (AIIB), becoming the institution's fifth-largest shareholder, according to an announcement by the South Korean Ministry of Finance on June 29.

Scenes before the AIIB signing ceremony in Beijing on June 29. Photo: Xinhua..

A total of 57 countries have joined the AIIB, which is seen as a potential counterweight to US-led multilateral lending mechanisms such as the Asian Development Bank (ADB) and the World Bank (WB).

According to a statement from the South Korean Ministry of Finance, the AIIB is expected to become operational later this year, with total contributed capital of $20 billion and total chartered capital of $100 billion.

Minister Choi Kyung-hwan is in Beijing today (June 29) to participate in the signing ceremony of the agreement's terms, presided over by Chinese President Xi Jinping.

China is the largest shareholder of the AIIB with 30.34% of the capital, followed by India with 8.52%, Russia with 6.66%, Germany with 4.57%, and South Korea with 3.81%.

China also holds 26.06% of the voting rights in the AIIB, followed by India with 7.51%, Russia with 5.93%, Germany with 4.15%, and South Korea with 3.5%.

Despite China's commitment to ensuring transparency in the AIIB's operations, the voting structure allows China to have a de facto veto power within the AIIB.

The US and Japan are not members of the AIIB, but they are still calling for greater transparency and governance in the new bank.

Along with concerns about the transparency of the AIIB, there are worries that China will exploit this new lending mechanism as a tool to increase its economic and geopolitical influence in Asia.

Thu Giang

(According to Yonhap)