Japan has initially rejected the invitation of China to become one of the founding members of the Asia Infrastructure Investment Bank (AIIB), a Beijing-sponsored regional bank that would compete with the Asian Development Bank (ADB).

Mitsuhiro Furusawa, Japan’s vice finance minister of international affairs, told Jin Liquin, the head of the working group to established the AIIB, that Tokyo is not convinced by China’s plan to set up a regional bank because of the existence of the ADB.

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Furusawa was reported to have issued the statement during his meeting with Jin in Tokyo last month.

During the said meeting, Jin asked Japan to participate in the AIIB and provide capital to help improve infrastructure in developing Asian countries.

But the Japanese official told Jin that Japan was reluctant to join the AIIB because of the presence of the ADB, which has worked well so far.

Japan and the United States are the largest shareholders of the ADB.

Jin earlier said funds from the ADB and the World Bank are far from satisfying the appetite for new infrastructure projects in the region. The new bank, he said, will provide a new financing channel for developing nations, especially low-income ones.

Sources said Jin requested Furusawa to continue discussing China’s invitation and told the Japanese official that the Beijing-backed AIIB will be launched even if Japan will not join it.

For the first time, Tokyo’s stance on the invitation became clear and experts said it could affect the decision of other countries invited by China.

The United States earlier issued a warning against Beijing’s growing assertiveness in the region and sources said Japan’s Prime Minister Shinzo Abe could urge his Australian Prime Minister Tony Abbott not to accept China’s invitation to sponsor the new regional bank.

Abe and Abbott will meet next week for a scheduled summit.

TagsJapan China, China-Japan, China Investment Bank, China Bank, Asia Infrastructure Investment Bank