Australia's senior cabinet ministers still have not decided if they should agree to China's proposed development bank funded by international investors as the U.S. is pressuring them not to sign the deal.

Australian Prime Minister Tony Abbott remains undecided on the issue and his government wants to conclude the Australia-China free trade deal by next month. The decision on the bank could affect the final details of the said deal, Business Spectator explained.

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Australian Treasurer Joe Hockey is considering letting Australia become part of the Asian Infrastructure Investment Bank, and Trade and Investment Minister Andrew Robb thinks the decision could have a positive impact on the country.

For Hockey, the bank is in line with his goal to convince G20 finance ministers that increasing infrastructure investment would also increase growth. For him, Australia needs to be part of the new bank to allow it to have influence in the project.

However, Foreign Minister Julie Bishop, like the U.S., is against the idea of Australia joining the internationally-funded bank. For her, the institution's governance is still not established and it would only give China a way to pursue its own goals in Southeast Asia, with Australia left with no control over the project.

The international community views China's bank proposal as a bid to compete with the U.S. in terms of power. Americans, on the other hand, see the plan as Beijing's way of expanding its influence in Southeast Asia, said the report.

The bank is designed to provide funds for energy, transportation, and telecom projects in underdeveloped nations. China said it will provide an initial capital of US$50 billion, the report stated.

China had already opened the project to other countries, in an effort to turn the institution into a rival for the World Bank. Qatar and Saudi Arabia are among the rich Middle Eastern countries that Beijing successfully invited.

Earlier this month, the New York Times (NYT) published a story saying Americans had launched efforts to dissuade its allies from joining the bank. While Beijing is pushing to confirm both Australia and South Korea as founders, Washington is convincing the two countries to reject the proposal, NYT said.

Should the U.S. succeed in dissuading Australia and South Korea from the bank, the scope of the project would be limited to the smaller nations only, the NYT article explained.

China is planning to unveil the plan for the development bank in November during the APEC summit in Beijing. Hockey will fly to China this week to attend the APEC gathering of finance ministers, where the new fund will be discussed.

TagsAsian Infrastructure Investment Bank, Australia, development bank, Asia-Pacific Economic Cooperation