SAN FRANCISCO >> U.S. Treasury Secretary Jacob Lew said Tuesday he was encouraged during his recent trip to China to hear Chinese leaders express a commitment to existing international institutions and high standards as they embark on their own international investment bank.
But Lew said the real test of the Asian Infrastructure Investment Bank will be the kinds of projects it funds.
The U.S. contends that the bank might extend credit without adequate environmental, labor and social safeguards. But more than 40 countries, including U.S. allies Britain, France and Germany, have moved to join. Japan’s government spokesman said Tuesday it is not planning to join the bank while Taiwan announced it would apply for membership.
"I was encouraged by my conversations in Beijing in which China’s leaders made clear that they aspire to meet high standards and welcome partnership," Lew told a gathering of the Asia Society Northern California in San Francisco. "Our consistent focus on standards has already had an impact and, as lending begins, the test will be the character of the projects funded and their impact on the people and countries they serve."
Washington says Beijing’s bank should work in partnership with existing institutions such as the World Bank and International Monetary Fund.
Lew said that China would benefit from years of "accumulated experience and knowledge."
"As we engage with China about the right approach to high standards for the international financial system, neither the United States nor China can afford to walk away from the institutions that make up the international economic architecture," he said.
Lew also touched on another sore subject between Washington and Beijing, this one over Beijing’s proposed curbs on foreign security technology.
He said he underscored during his meetings in Beijing that such policies would damage the U.S. and China’s economic relationship.