China, which aired the idea of creating the Asian Infrastructure
Investment Bank in October to fund projects in Asia, has said it
would likely be the largest shareholder in the bank, with a stake of
as much as 50 percent.
The initiative is one of a growing list from China and which experts
say is part of the country's attempt to influence Asia's security
and financial architecture.
Chinese leaders have sought to downplay the politics behind the
proposed infrastructure bank and Kim, who is visiting China, said a
new bank made good business sense.
"Any estimate of the infrastructure needs in the developing
countries start at about $1 trillion a year," Kim told reporters at
a briefing, adding that the figure greatly exceeded private-sector
investment of about $150 billion a year.
"So we welcome any new organizations. We think the need for new
investment in infrastructure is massive."
The World Bank can work with any new infrastructure bank once it
becomes a reality, be it a bank led by the emerging BRICS nations or
the Asian Infrastructure Investment Bank, Kim said.
The BRICS group, comprised of Brazil, Russia, India, China and South
Africa, is also in talks to create a $100-billion development bank
and has reached broad agreement on the project, a senior Chinese
diplomat said on Monday.
Praising China's progress in financial reforms, Kim reiterated the
World Bank's forecast for its economy to grow 7.6 percent this year
before cooling a little to expand 7.5 percent in 2015.
Faced with a maturing economy likely to cool in the next few years,
China is trying to re-orient itself and cut its reliance on exports
and heavy investment for growth.
Authorities also want to scale back central planning and let markets
play a bigger role, changes that analysts say could weigh on
economic expansion in the near term.
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Indeed, China's economic growth drooped to an 18-month low of 7.4
percent in the first quarter as investment slowed, though there are
signs a recovery may be nigh.
"We are very encouraged about the fact that, despite a lower growth
rate, the Chinese government continues on the path of these
reforms," Kim said.
"To be able to sustain high-quality growth in China, they are going
to need to stick to the reform agenda," he added. "So far so good
and that's exactly what they are doing."
Although China has not carried out any big-bang reforms, it has
taken small steps in some areas, including allowing private
investment in some sectors, and giving some regional governments the
right to raise and repay their own debt.
(Reporting by Aileen Wang and Koh Gui Qing; Editing by Miral Fahmy)
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