The preparatory work of a new northeast Asia bank, which is devoted to serving the economic development of northeast Asia nations, has begun. The speedy implementation of the banking scheme, which was begun a decade ago, shows the urgency for further economic cooperation in East Asia.
The decision was made at the three-day Pacific Economic Cooperation Council (PECC) meeting held in Tianjin at the end of October. The bank is likely to be established early next year.
The bank plans to position itself as a regional profit-taking commercial bank with the main task of providing financial service for SMEs and individuals in northeast Asia. Its headquarters are said to be located in Tianjin, a port city which is only 130 kilometers away from Beijing, the nation's capital.
Although the meeting didn't stipulate the formal title and registered capital of the bank, participants agreed that China, Japan and South Korea were the 3 main shareholders with almost the same shares.
In addition, the new bank will not put limitations on any investors from other countries.
The 3 main proposing nations, China, Japan and South Korea, have set up their own preparatory teams, and the Chinese preparatory team is composed of 3 members, including central bank officials and economists, Beijing-based China Business Post reported quoting the words of a Chinese participant.
Currently, entrepreneurs and financial institutions in the 3 nations are responding actively for the new banks, although experts warn that China's financial laws might lay obstacles on the Sino-foreign commercial bank.
"For most undeveloped areas in northeast Asia, the most urgent thing was to finance infrastructure construction, including expressways, railways, and pipelines, as well as air transport, port and port facilities, telecom facilities, and energy, water and water disposal facilities," said Duck-Woo Nam, the former Premier of South Korea and scheme proposer, at the beginning of November.
On the other hand, huge capital is still needed in China, Mongolia, North Korea and Far East areas of Russia, though there are already two non-profit international financial institutions in the region, the World Bank and the Asia Development Bank.
However, many insiders would rather believe it is a symbol for further regional economic cooperation.
Statistics show that the three nations now have become the major trade partners of one another. To take 2002 for example, the trade volume between them has exceeded US$200 billion, and it still keeps growing.
The concept of the East Asia Free Trade Zone, which mainly includes China, Japan and South Korea, was put forward many years ago. However, until now, free trade area (FTA) talks have not been initiated considering sensitive factors.
In June 2003, the World Bank had already released its research report entitled East Asia Integrates: A Trade Policy for Shared Growth, urging quick action to address potential challenges.
Also, the 3 nations have come to be aware of the importance and urgency for further economic cooperation. In the ASEAN plus 3 (China, Japan and South Korea) meeting, which was held in Oct.7-8 in Bali, Indonesia, the leaders of the 3 nations had signed cooperation files. Such regional cooperation institutions like NE Asia bank will certainly boost their economies and benefit all.
(China.org.cn by Tang Fuchun and Daragh Moller, November 24, 2003))