South Korea becomes AIIB's 5th largest shareholder

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

Scene 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 come into operation by the end of this year, with a total contributed capital of 20 billion USD and a total charter capital of 100 billion USD.

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

China is the largest shareholder of AIIB with 30.34% of the capital contribution, 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 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 gives China a de facto veto power in the AIIB.

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

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

Thu Giang

(According to Yonhap)