Singapore has expressed its intention to accept China’s invitation to become a founding member of a new regional bank to fund infrastructure projects in Asia, said Singapore’s Ministry of Foreign Affairs (MFA).

Singapore’s intention was conveyed by Deputy Prime Minister Teo Chee Hean at a meeting in Beijing on Monday (July 28) with Chinese Vice-Premier Zhang Gaoli, who had invited Singapore to be part of the Asian Infrastructure Investment Bank (AIIB). The new bank, led by China, will fund infrastructure projects in the region.

China has said it will probably be the largest shareholder in the AIIB, with a stake of as much as 50 per cent. Reports suggested that the bank would start with US$50 billion (S$62.1 billion) in capital, though Beijing has not confirmed this.

Chinese President Xi Jinping had mooted the AIIB during a visit to Indonesia in October, in what some observers said was an attempt to expand Beijing’s influence on Asia’s security and financial architecture and compete with the Asian Development Bank (ADB) and the World Bank. Japan and the United States are the two largest shareholders of the 67-member ADB, with stakes of 15.7 per cent and 15.6 per cent respectively. Both countries also have a combined voting power of 26 per cent, compared with China’s 5.47 per cent, said the bank’s website.

The need for infrastructure in the Asia-Pacific region is substantial. The ADB has estimated that between 2010 and 2020, Asia will need to spend approximately US$8 trillion on infrastructure to maintain current levels of economic growth.

China has held talks with interested Asian countries on the AIIB, and a memo on setting up the bank is due to be signed in the next few months, said a Xinhua news report this month. “We are actively discussing a founders list, a basic framework and regulations to put the bank into operation as soon as possible,” Xinhua quoted Chinese Finance Minister Lou Jiwei as saying.