France, Germany and Italy to join China-backed bank

Chinese Finance Minister Lou Jiwei (C) signs with guests at the signing ceremony of the Asian Infrastructure Investment Bank at the Great Hall of the People in Beijing on Oct 24, 2014. [Photo/CFP]

France, Germany and Italy have agreed to follow Britain's lead and join a China-led international development bank, dealing another blow to US efforts to keep Western nations out of the new institution, the Financial Times said on Tuesday.

The newspaper, quoting European officials, said the decision by the four countries to become members of the Asian Infrastructure Investment Bank (AIIB) was a major setback for Washington, which has questioned if the new bank will have high standards of governance and environmental and social safeguards.

The AIIB was launched in Beijing last year to spur investment in Asia in transportation, energy, telecommunications and other infrastructure. It was seen as a rival to the Western-dominated World Bank and the Asian Development Bank.

China said earlier this year a total of 26 countries were founder members, mostly from Asia and the Middle East.

Japan, Australia and South Korea remain notable absentees in the region, though Australian Prime Minister Tony Abbott said at the weekend he would make a final decision on AIIB membership soon.

South Korea has said it is still in discussions with China and other countries about its possible participation.

Japan, China's main regional rival, has the biggest shareholding in the Asian Development Bank along with the United States.