China has begun preparations to set up a multilateral bank to fund infrastructure projects in Asia, the Ministry of Finance said on Friday in an online statement.

The ministry said the Asian Infrastructure Investment Bank would have an initial paid-in capital of $50 billion, contributed by its members.

The amount and proportion of capital contributed by each member will be decided through discussions, and the capital can be increased as needed, the statement quoted Finance Minister Lou Jiwei as saying.

The bank will have a mandate to fund infrastructure projects in the region, complementing the work of other entities such as the Asian Development Bank.

"The AIIB will mainly focus on infrastructure construction and other productive fields in Asia to promote regional connectivity and economic cooperation," Lou said. "But if conditions are right, the AIIB will also explore business opportunities outside the region," he added.

"Existing multilateral development banks, such as the World Bank and the Asian Development Bank, put their priorities more on poverty reduction," Lou said, adding that China will continue supporting those institutions.

Plans for the bank were first announced by President Xi Jinping and Premier Li Keqiang during visits to Southeast Asia in October.

Lou said in the statement that the first multilateral meeting on the bank ended on Jan 24, with some countries expressing a willingness to become founding members. The statement didn't identify the countries.

The founding members will sign a memorandum later this year in a bid to launch the AIIB as soon as possible, according to the statement.

Funds in existing multilateral development banks are limited and savings rates are high in many countries in Asia, so it is necessary to consider establishing a new regional platform to channel more funds into infrastructure, Lou said.

The AIIB will facilitate multilateral communication among member countries and stimulate regional economic growth, Lou said.

China Daily-Reuters

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