China to offer $10 billion in infrastructure loans

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China, the world’s second-largest economy, is reportedly offering $10 billion in infrastructure loans to Southeast Asian countries.

Vice Foreign Minister Liu Zhenmin told a news conference during the annual East Asia Summit held in Kuala Lumpur that his country will also provide aid worth 3.6 billion yuan (U.S. $560 million) to underdeveloped states within the Association of Southeast Asian Nations (ASEAN) in 2016.

The official did not specify the bank that would provide the loans but there are speculations that this would come from the Asian Infrastructure Investment Bank (AIIB), a development bank backed by China, which won support from Asian and Western European economies this year despite an ambivalent response from the United States, said Reuters.

The pledges come as China seeks to expand its influence in the developing world, including Southeast Asia, with government aid programs and loans.

Earlier the United States warned nations against joining the AIIB, expressing concern over how much influence China will wield in the new institution.

China has maintained it will not have veto powers, unlike the World Bank where Washington has a limited veto.

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