France, Germany, Italy join China’s Infrastructure Investment Bank

France, Germany and Italy have confirmed they’ll join China’s new Asian Infrastructure Investment Bank (AIIB). Participation in the rival to the US-led World Bank is seen as a setback for the Obama administration.

The three European countries on Tuesday confirmed in a statement they intend “to become founding members of the Asian Infrastructure Investment Bank,” according to AFP.

“We want to bring our long experience… to help the bank build a solid reputation,” said German Finance Minister Wolfgang Schaeuble, speaking also for Italy and France at a joint press conference with Chinese Deputy-Premier Ma Kai on Tuesday in Berlin. He added that the three countries want to make a contribution to the positive development of the Asian economy, in which German companies were actively taking part.

Chinese Foreign Ministry spokesman Hong Lei welcomed the decision, saying “the AIIB is an open and inclusive multilateral investment institution.”

“Participation by countries outside the region will intensify the extensive representatives of the AIIB,” he added.

The decision of the three European countries comes after Britain last week became the first Western country to agree to become a founding member of the AIIB, FT reports. The UK government said the decision was in the country’s national interest, but it got a negative reaction from the United States.

The new China-led bank is expected to challenge the Washington-based World Bank, so the US is increasing pressure on its allies not to join the institution. The US’ concern is that the new investment bank might not have high standards of governance and environmental and social safeguards.

The new bank is expected to challenge the Western dominance of the US-led World Bank and IMF in global infrastructure projects, which experts believe will create healthy competition.

South Korea, Switzerland and Luxembourg were also considering joining the Asian Infrastructure Investment Bank, the Financial Times reported.

Australian Prime Minister Tony Abbott said he would make a final decision on AIIB membership soon. South Korea and other countries are in discussions with China over possible participation.

China’s main regional rival Japan said earlier this month that Asian countries including Japan have until March 31 to decide on becoming AIIB founding members.

“They told us they are considering. Whether Japan will join, we do not know. It is Japan’s own decision,” Chinese Finance Minister Lou Jiwei said, according to the Xinhua news agency.

Nearly 30 countries have confirmed their participation in the AIIB, which is aimed at helping finance infrastructure projects across Asia and is expected to come into being this year.

The AIIB was formally launched by Chinese President Xi Jinping in 2014, and is expected to become a tool of a broader Chinese push for growing international power and economic significance.