ADB sees scope for cooperation with new lender

The Asian Development Bank will consider cooperating with the new Asian Infrastructure Investment Bank while also sharpening its own competitive edge, Takehiko Nakao, president of the ADB, said on Thursday.

The establishment of the AIIB is "understandable", because financing needs for infrastructure in the region are very big, Nakao told reporters in Beijing. "If it's established, we're prepared to consider cooperation with the new bank."

With initial capital of $50 billion, the AIIB, proposed by China, will be officially launched on Friday, the Financial Times reported.

That has yet to be confirmed by the Chinese government.

Some have speculated that the new bank is meant to be a rival to the World Bank and the ADB, but Nakao said he is not "concerned".

"Chinese authorities have repeatedly explained it to me and I believe that the bank is not for competition with the ADB but to complement the role of ADB," he said.

However, he said that there is a misunderstanding that the ADB is for poverty elimination and the AIIB is for infrastructure support.

The majority of the ADB's loans are to finance infrastructure such as roads, railways and power facilities.

"In this regard, there's no difference," he said.

He said that the regional development bank, which is half-a-century old, will reform itself to improve its services and expand its lending capacity.

He said that the ADB's staff of some 3,000 people, with half having a high-level professional background, is a great asset for the bank.

"If a new bank is designed, it also should meet international standards," he said.

The ADB has 48 regional members and 19 member countries outside of Asia, including the United States, Canada and Germany.

The ADB does not have any position on choices by its member countries to join the AIIB, he said. "It's a decision by the country."

Nakao came to Beijing to attend this week's APEC 2014 Finance Ministers' Meeting and he also attended a high-level workshop on joint research for the upcoming Five-Year Plan (2016-2020) with the National Development and Reform Commission, China's top economic planner.

Supporting the Chinese government in the introduction of an environmental tax and helping the government prepare for public finance reform and the establishment of a debt management system are among a package of policy recommendations that the ADB provided to the NDRC.

Major reforms are needed in areas such as State-owned enterprises, the financial sector, environmental protection and urban and rural development, he said.

China's GDP growth is forecast to be 7.5 percent in 2014 and 7.4 percent in 2015, the ADB said in September.

Asia will remain the engine for the world economy in 2014. Regional growth is forecast to pick up to 6.2 percent in 2014 and further to 6.4 percent in 2015, from 6.1 percent in 2013, according to the ADB.