The UK is backing China's Asian Infrastructure Investment Bank, and Washington isn't happy about it

 
Sarah Spickernell
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Chancellor George Osborne has been pushing for closer ties with China (Source: Getty)

Britain has become a founding member of the Asian Infrastructure Investment Bank, and the US is far from impressed.

The financial institution poses a threat to western rivals such as the World Bank, and the White House has accused the UK of “constant accommodation” of China according to the FT.
The bank was set up by Beijing in what some consider an attempt to rival west-centric financial institutions set up after the Second World War. In China's opinion, the US has too much say in the World Bank and International Monetary Fund (IMF).
Worth $50bn, it was launched by China in October last year. 20 nations are backing it, but the UK is the first of the G7 countries to do so. The US has been trying to urge other nations against joining, and those who followed their advice include Japan, South Korea and Australia.
While the US says it is not against the bank being set up, officials believe China could use to to manipulate foreign policy.
But UK chancellor George Osborne is adamant that backing the bank is the right decision, reflecting how important he views building a relationship with China.
“Joining the AIIB at the founding stage will create an unrivalled opportunity for the UK and Asia to invest and grow together,” he said.
According to the UK Treasury, Osborne spoke with his US counterpart Jack Lew before going ahead with the backing, and knew the move would not be received well by the White House.

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