SHANGHAI, China: The old China Pavilion from the 2010 World Expo is seen next to the proposed site of the headquarters of BRICS development bank in the Pudong development zone in Shanghai Thursday. China has already chosen a site for the future Shanghai h BEIJING, July 17 (Reuters): China cannot be concerned about only itself and must join a development bank being created by emerging market nations as its economy is intertwined with that of the world, the Chinese central bank said on Thursday.
In a short defence of why China will invest $41 billion in a bank that it is unlikely to borrow from, the central bank said China stands to benefit if it helps to stabilise the economies and financial markets of other nations.
"Our economy is highly integrated with the global economy. If a sharp turmoil appears in the global financial market, it is difficult to be concerned only about ourselves," the central bank said in an online statement.
"Helping them achieve financial stability is not only in line with our own interests, it is also in line with global interests."
Leaders of the BRICS emerging market nations - Brazil, China, India, Russia and South Africa - launched a $100 billion development bank and currency reserve pool this week, their first concrete attempt to counter the influence of western dominance in the international financial system.
The New Development Bank is one of two international development banks that China is promoting that will either be led by it, or have strong Chinese influence, as an alternative to western institutions such as the World Bank.
China will contribute $41 billion to the New Development Bank compared with $18 billion each from Brazil, India and Russia, and $5 billion from South Africa.
The bank will have its headquarters in Shanghai and will accord China with the largest voting right at 39.5 per cent, compared with 18.1 per cent each for Brazil, Russia and India, and 5.75 per cent for South Africa, the Chinese central bank said.
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