Jake's View | New Asia bank part of China's agenda

China and 20 other countries yesterday signed a memorandum of understanding to create an Asian infrastructure bank that will help finance the region's US$800 billion annual needs.

Let's get it clear right away that this is not about helping poorer Asian countries build waterworks, power stations and roads. This is about Beijing pushing to have itself recognised as No 1 in Asia.

To the extent that recognition as No 1 is achieved by setting up an international development bank, the No 1 slot is still held by Japan, which is boss of the Asian Development Bank. In the larger context, it is held by the United States, which is boss of the World Bank.

Neither of these two welcome a challenge by Beijing and both have thus been busy arm-twisting various Asian governments not to sign up with Beijing. So far, South Korea and Indonesia have heeded the call.

Leaving aside how silly this political spat is, what stands out here first of all is the estimate that Asia needs US$800 billion a year of infrastructure investment. The obvious sub-text is that these needs are so great that they can only be met by a big development bank.