Chinese President Xi Jinping launched a new international development bank seen as a rival to the US-led World Bank at a lavish ceremony on Saturday, as Beijing seeks to change the unwritten rules of global development finance.
Despite opposition from Washington, US allies including Australia, Britain, German, Italy, the Philippines and South Korea have agreed to join the Asian Infrastructure Investment Bank (AIIB) in recognition of China's growing economic clout.
"Asia's financing needs for basic infrastructure are absolutely enormous," Xi said in a speech at the launch, adding the bank would aim to invest in projects that were "high-quality, low-cost."
In order for Asia to continue to be the most dynamic region for global growth, it needs to invest in infrastructure and connectivity, Premier Li Keqiang said, during the afternoon session of the opening ceremony.
The AIIB is expected to lend $10 billion-$15 billion a year for the first five or six years and will start operations in the second quarter of 2016.
Even so, no specific infrastructure projects would be announced "for the time being," AIIB President Jin Liqun told Reuters on the sidelines of the launch.
Luxembourg Finance Minister Pierre Gramegna said the establishment of the AIIB was "further proof of the rebalancing of the world economy."
A successful AIIB that sets itself apart from the World Bank and the International Monetary Fund (IMF) would be a diplomatic triumph for China, which opposes a global financial order it says is dominated by the United States and does not adequately represent developing nations.
The AIIB will require projects to be legally transparent and protect social and environmental interests, but it will not force borrowers to adopt the kind of free-market practices favoured by the IMF, sources told Reuters in September.
By not insisting on some free market economic policies recommended by the World Bank, the AIIB is likely to avoid the criticism levelled against its rivals, which some say impose unreasonable demands on borrowers.
It could also help Beijing stamp its mark on a bank regarded by some in the government as a political as much as an economic project.
Baikuntha Aryal, joint secretary at Nepal's Ministry of Finance, said the Himalayan country was hoping the AIIB would fund roads, hydropower and urban development projects.
"The AIIB is specifically for infrastructure so we see it as a supplement to projects in Nepal funded by the ADB [Asian Development Bank] and World Bank," he said.
China has an initial subscription of $29.78 billion in authorised capital stock in the AIIB, out of a total of $100 billion. It invested another $50 million on Saturday.
Chinese GDP tops $10 billion
China's gross domestic product (GDP) totaled more than $10 trillion in 2015 and the economy grew by around 7 percent, with the services sector accounting for half of GDP, Premier Li Keqiang said on Saturday.
The premier also said that employment had expanded more than expected with 900 million people making up the country's total workforce, including 150 million skilled professionals.
Consumption contributed nearly 60 percent of growth, Li said, at the opening ceremony for the China-backed Asian Infrastructure Investment Bank (AIIB) in Beijing.
China's fourth-quarter and full-year 2015 GDP figures are expected to be released on Jan. 19.
Analysts polled by Reuters have forecast 2015 growth cooled to 6.9 percent, down from 7.3 percent in 2014 and the slowest pace in a quarter of a century.