SEJONG, South Korea/SEOUL, Mar 27: South Korea hopes its infrastructure companies will benefit from the country joining the China-backed Asian Infrastructure Investment Bank (AIIB), the finance ministry said on Friday.
Shares in some iron and steel products makers rose sharply in early trading, partly on hopes for new orders when the AIIB is operational and funding infrastructure projects, which is likely next year. Histeel Co rose 14.8 percent and Hanil Iron & Steel was up 10.3 percent at 0123 GMT.
‘(The government) expects our companies to win many orders in areas such as communications, energy and transportation, where they have strength,’ Song In-chang, head of the finance ministry’s international finance bureau, told reporters. Seoul announced on Thursday that it would seek to join the AIIB as a founding member, the latest U.S. ally to do so despite Washington’s misgivings. China is South Korea’s biggest trading partner and the two countries are set to sign a free trade agreement in the first half of this year. China has set March 31 as the deadline for joining the bank as a founder member, which will be capitalized at an initial $50 billion to provide project loans to developing nations. Most Asian countries, as well as Britain, Germany, France and Italy, have applied.
The AIIB has been seen as a significant and possibly historic setback to U.S. efforts to extend its influence in the Asia-Pacific region to balance China’s growing financial clout and assertiveness.
The major absentees in the region from the bank are Australia and Japan. Australia has said it is close to joining, but Japan remains cautious.
(AGENCIES)
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