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 Shares in some South Korean iron and steel products makers rose
sharply, partly on hopes for new orders when the AIIB is operational
and funding infrastructure projects, which is likely next year.
Histeel Co rose 14.8 percent and Hanil Iron & Steel was up about 6
percent by the afternoon.
"(The government) expects our companies to win many orders in areas
such as communications, energy and transportation, where they have
strength," Song In-chang, head of the finance ministry's
international finance bureau, told reporters.
Seoul announced on Thursday it would seek to join the AIIB as a
founding member, the latest U.S. ally to do so despite Washington's
misgivings. China is South Korea's biggest trading partner and the
two countries are set to sign a free trade agreement in the first
half of this year.
China has set March 31 as the deadline for joining the bank as a
founder member, which will be capitalized at an initial $50 billion
to provide project loans to developing nations.
China's finance ministry said on Friday that Luxembourg has been
accepted as a founding member, taking the number to 28. According to
Seoul, applications from six countries are pending - Britain,
Germany, France, Italy, Switzerland and South Korea.
The AIIB has been seen as a significant and possibly historic
setback to U.S. efforts to extend its influence in the Asia-Pacific
region to balance China's growing financial clout and assertiveness.
The major absentees in the region from the bank are Australia and
Japan. Australia has said it is close to joining, but Japan remains
cautious.
"What is important is not the date but whether we can see what we
have been asking (China) guaranteed," Finance Minister Taro Aso told
reporters after a cabinet meeting on Friday.
Aso reiterated Japan's concerns relating to fair governance at the
AIIB, establishment of the board of directors, debt sustainability
and respect for social and environmental issues.
"Unless (China) clarifies these matters, which are not clear at all,
Japan remains cautious," he said.
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Song at the South Korean finance ministry said some of the concerns
among prospective members had recently been resolved, such as giving
the board of directors the power to decide on investment projects,
instead of the management.
The Wall Street Journal reported this week that China had proposed
to forgo veto power at the AIIB to attract more countries to join
the new bank.
Chinese foreign ministry spokeswoman Hua Chunying has however
dismissed the notion that Beijing sought - or gave up - veto power
as an "impossible proposition".
Taiwan has also expressed interest in joining the AIIB, but has not
so far been invited. "We should not look on from the sides, we
should be actively involved," President Ma Ying-jeou said in an
interview on Thursday with a local media group, according to the
presidential office.
China considers Taiwan as a renegade province and has opposed its
membership in international organizations if it confers any
sovereignty on the island.
(Additional reporting by Yeawon Choi in SEOUL, J.R. Wu and Faith
Hung in TAIPEI, Ben Blanchard in BEIJING and Tetsushi Kajimoto in
TOKYO; Editing by Raju Gopalakrishnan)
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