The world’s second-largest economy, China is offering $10 billion in infrastructure loans to Southeast Asian countries. China seeks to expand its influence in the developing world, including Southeast Asia, with government aid programs and loans.
- It will also provide aid worth 6 billion yuan (US $560 million) to underdeveloped states within the Association of Southeast Asian Nations (ASEAN) in 2016, as announced during the annual East Asia Summit, which this year was held in Kuala Lumpur.
Which bank will provide loan?
It was not publicized that which bank will provide loan but it will most likely to be the Asian Infrastructure Investment Bank (AIIB), which is a development bank backed by China, won support from Asian and Western European economies this year despite an ambivalent response from the United States.
- The AIIB was officially created in June and is set to rival the World Bank and Asian Development Bank in development work in Asia. It is set to officially launch at the end of this year.
The United States initially cautioned nations against joining the AIIB and has expressed concern over how much influence China will wield in the new institution.
- China has maintained it will not have veto powers, unlike the World Bank where Washington has a limited veto.
ASEAN groups – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.