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Friday, November 6, 2015, 17:12

China set to join EBRD

By Agencies

LONDON - China has applied to become a member of the European Bank of Reconstruction and Development, the EBRD said on Thursday, giving Beijing a new way of extending its global influence after its steps to boost trade links with Europe and Asia.

Confirming the development, the Foreign Ministry said on Friday that China joining the EBRD would be a reciprocal choice for all parties.

Ministry spokesperson Hua Chunying told a regular press briefing that China wanted to connect its "Belt and Road" initiative with the European Union investment plan, known as the Juncker Plan, and improve cooperation with EBRD.

The Belt and Road initiative was proposed by President Xi Jinping in 2013 to revive the ancient trade route between Asia, Europe and Africa through investment and infrastructure programs. The Juncker Plan was initiated by European Commission President Jean-Claude Juncker to boost the European economy.

"We believe that China's involvement would be conducive to all parties," Hua said.

The EBRD board is expected early next week to recommend approval of China's bid to the bank's shareholders.

That group, dominated by G7 governments, is likely to make a final decision in December and, if successful, China would take a symbolic but prestigious stake, and the EBRD would not invest there.

Joining the EBRD would build on initiatives by the world's second largest economy to thicken trade ties with Europe and Asia, the so-called "One Belt, One Road" plan.

"China has made a formal application for membership of the EBRD just a few days ago. This is going to be considered by the board," EBRD acting chief economist Hans Peter Lankes said. "We would expect there to be a mid-December decision (by shareholders) on this."

In May, the EBRD said it was ready to cooperate on projects with China and its newly launched Asian Infrastructure Investment Bank (AIIB).

A number of European governments decided to become founding members of the AIIB despite misgivings in the United States.

The EBRD was set up by governments in 1991 to support former communist states in eastern Europe but has expanded its mandate in recent years to parts of North Africa and central Asia, as well as euro zone crisis countries Greece and Cyprus.

The bank is owned by 64 countries altogether, the European Union and the European Investment Bank.

An EBRD official said China had initially sounded out the bank about becoming a member back in August and the formal request came after Chinese President Xi Jingping visited London, where the EBRD is based, last month.

"Is this an area where Europe and China and the EBRD can work on the integration and connectivity of Europe and China? Yes, certainly," said Lankes.

One of the areas most likely to interest China is the EBRD's work in neighbouring Kazakhstan, where it is set to invest around 1 billion euros (US$1.09 billion) in coming years to help extend a new "Silk Road" from Western China into Russia.

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