ADB Says Will Cooperate, Not Compete With AIIB

The Japanese-led Asian Development Bank is willing to cooperate, rather than compete, with China's development finance and infrastructure plans under its "One Belt, One Road" initiative, the bank's head said.

ADB President Takehiko Nakao's comments were made at the start of the bank's four-day annual meeting in Yokohama, eastern Japan, where China's rising influence is expected to be among key topics of discussion, Reuters reported.

His public comments align with those of policymakers seeking to dispel the view Japan and China are competing for influence through development finance. However, Nakao warned creditors about the costs of projects in economies that are targeted by China's high-profile OBOR initiatives.

"It's a good idea to connect countries and to promote activities in this region," Nakao said, when asked about how the ADB should deal with the OBOR.

"We can cooperate because we have similar ideas," he said at a news conference kicking off the annual meeting. He added that he discussed areas of cooperation with Chinese Finance Minister Xiao Jie, who will be in Tokyo for a meeting with his counterparts from Japan, South Korea and Southeast Asian nations on Friday.

Bank of Japan Gov. Haruhiko Kuroda, who before Nakao headed the ADB, said there was ample room for Asia Infrastructure Investment Bank to cooperate with other development banks like the ADB and the World Bank.

"There are huge infrastructure needs so it's great to have more institutions keen to support this," he told reporters on Thursday, adding that he did not think the AIIB would conflict with the roles played by the ADB and the World Bank.

Record Year

The ADB is coming off a record year for lending and is the region's major financier for development, but its meeting could quickly fade as attention turns to the OBOR summit on May 14-15.

Many OBOR projects are supported by China's state-owned banks and its fledgling regional lender, the AIIB, which could become a potential rival of the Manila-based ADB but for now is much smaller.

Nakao said the vast need of infrastructure finance in Asia meant that the ADB and the AIIB could cooperate and complement each other, instead of considering each other as rivals.

"Because we have different objectives and different kind of ideas about management, I think we can complement each other," he said. "There are many things in common so we can cooperate."

The ADB and the AIIB have agreed to co-finance three projects—two last year and one this year, Nakao said.

The two lenders have discussed how they can use local currencies for financing instead of dollars, how they can enhance expertise by their staff and how they can secure environmental and social safeguards, Nakao said.