China-led AIIB to start providing loans in mid-2016

The Chinese-led Asian Infrastructure Investment Bank (AIIB) is expected to start offering loans to foreign countries in the middle of next year, a Chinese state media outlet reported on Saturday. 

The AIIB was formally established on Friday and its board of directors will hold its first meeting at an opening ceremony set for Jan. 16-18 next year, according to China's finance ministry.

Citing Chinese Finance Minister Lou Jiwei, the state-run China Daily said the AIIB is expected to grant its first loan in the middle of next year.

"The launch of the AIIB marks a milestone for the reform of the international governance system," Lou was quoted as saying.

During the January meeting, the AIIB will pick its chief and "12 directors for each electoral region," according to the report.

"China holds 26.1 percent of the voting rights and has veto power over these decisions," it said.

With a paid-in capital of US$100 billion and 57 members, including South Korea, the AIIB has been seen as a potential counterbalance to U.S.-led multilateral lenders such as the Asian Development Bank and the World Bank.

The United States and Japan did not join the AIIB, while calling for transparency and higher governance in the new bank.

Along with concerns over transparency in the AIIB, there are worries that China could exploit the new lender as a means to increase its own economic and geopolitical influence. (Yonhap)