U.S. warns Korea against joining China’s bank

Washington told a visiting Seoul official that it wants Korea to say no to a Chinese initiative to establish a new development bank for Asia, according to Kyodo News Agency.

Caroline Atkinson, the deputy national security advisor for international economics, expressed U.S. concerns about Korea being part of the Asia Infrastructure Investment Bank (AIIB) project in a meeting with a senior Korean government official in the United States earlier this month, the Japanese news outlet reported.

The JoongAng Ilbo reported on Friday that Washington expressed its concerns about Korea joining the AIIB through the U.S. Embassy in Seoul early this month.

According to officials at the Blue House and other government agencies yesterday, the Seoul official is a high-ranking member of the Ministry of Strategy and Finance, and the official was dispatched to find out more about the U.S. stance on the issue after the U.S. Embassy in Seoul expressed its concern to the Korean government.

The establishment of the AIIB, which Chinese leader Xi Jinping proposed last October, will test Korea’s adroitness in engaging deeply with the two superpowers without estranging either. According to the JoongAng Ilbo report, citing government and financial authorities, the Chinese government has repeatedly requested since last month that Korea announce its decision to join the project when Xi visits Seoul on July 3.

The U.S. government says China is highly likely to use the bank for political purposes, and if Korea joins, its credibility as a U.S. ally might be affected.

“We have not been assured that the AIIB would implement the best practices,” a U.S. national security council spokesman told Kyodo News Agency.

Analysts see an attempt by Washington to contain the increasing power of China. The AIIB would rival the World Bank and the Asian Development Bank, which are dominated by Western countries and Japan, with an aim to create a new financial order centered on China.

BY MOON GWANG-LIP and PARK JIN-SEOK [joe@joongang.co.kr]