Taiwan seeks membership of major Asian investment bank

Taiwan has said it would make a formal application to join the Asian Infrastructure Investment Bank, becoming the latest economy to express interest in the Beijing-backed institution.

Taiwan will present a letter of intent to the AIIB preparatory committee, said a statement from the presidential office on Monday following a national security meeting chaired by President Ma Ying-jeou.

It was not immediately clear if the island could actually join the AIIB, since China has long opposed allowing Taiwan to join any international organisations that appear to confer sovereignty upon it.

Analysis from our correspondent

Few other countries in the world could manage what Beijing is proposing right now. In essence Beijing is seeking to end Washington’s dominant role in two of the world’s most important financial institutions – the World Bank and International Monetary Fund. China feels that for too long the voice of the United States has prevailed in both and that neither organisation reflects the true shape of the new global economy. At face value, the proposed Asia Infrastructure Investment Bank seems like an extension of China’s cheque-book diplomacy; a continuation of what it has been doing in Africa and South America. But the bank neatly dovetails with another ambitious project Beijing has been actively touting – the revival of the fabled silk road trade route between China and Europe. It involves billions of dollars of new infrastructure – rail lines, highways, pipelines – that will bind China to central Asia, leading to multiple new routes for Chinese exports. It hopes that infrastructure will be funded with loans from the AIIB. Despite the government’s lofty aims, the bank does not yet have an office or even a website. A reminder that for now it is more symbolism than substance.

Membership of the AIIB would assist Taiwan’s push for regional economic integration “and increase the odds of the country participating in international affairs and international economic and trade organisations”, Ma’s spokesman Charles Chen said in the statement.

Ma voiced a desire to join the bank in an interview with a local newspaper last week, saying: “We should not stay on the sidelines. (We) should actively participate in it.”

Britain, Germany, France and Italy have all said they intend to join the $50bn bank, despite scepticism about the AIIB in Washington and Tokyo.

South Korea on Thursday became the latest country with close ties to the US to say it would seek membership.

China ‘welcomes all countries’

Last week China’s vice finance minister Shi Yaobin said it “welcomes all countries” to join the bank, which it has touted as a tool for financing regional development alongside other lenders such as the US-led World Bank and the Japan-led Asian Development Bank.

Taiwan’s involvement in international agreements is often curtailed by China, which considers the island part of its territory awaiting reunification. 

They split in 1949 at the end of a civil war. 

Taiwan has, however, joined international organisations in the past under different names. The International Olympic Committee refers to it as “Chinese Taipei”, and it is known as the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu at the World Trade Organization.

Ties have improved rapidly between China and Taiwan since Ma and his Beijing-friendly Kuomintang (KMT) party came to power in 2008.

The KMT, however, is tipped to lose power in next year’s presidential poll in favour of the China-sceptic Democratic Progressive Party.

The opposition party expressed reservations over the AIIB on Friday. Spokesman Cheng Yun-peng said the government “should evaluate why is it necessary and ensure that Taiwan will join with an identity that won’t hurt our dignity or affect the overall national development”.