China and 20 other countries moved forward on Friday towards setting up an Asian infrastructure lender seen as a counterweight to Western-backed international development banks.
The signatories put their names to a memorandum of understanding to establish the Asian Infrastructure Investment Bank (AIIB) at a ceremony in the Great Hall of the People in Beijing.
The institution, whose development has been driven by China and which is widely expected to have initial capital of $50 billion, it intended to address the region's burgeoning demand for transportation, dams, ports and other facilities, officials say.
"In China we have a folk saying," Chinese President Xi Jinping told delegates after the ceremony. "If you would like to get rich, build roads first, and I believe that is a very vivid description of the very importance of infrastructure to economic development."
China's rise to become the world's second-largest economy has been accompanied by a desire to play a greater role in international organisations, such as the International Monetary Fund, the World Bank and the ADB, which have been dominated by Europe, the United States and Japan.
But other than China, among Asia's 10 largest economies only India and Singapore signed the AIIB memorandum, with three of the top five -- Japan, South Korea and Indonesia -- notably absent.
The Japanese head of the Asian Development Bank, another regional lender, said Thursday that questions remained over the AIIB's structure and it needed to adhere to international standards.
"Our position about AIIB is first that it is understandable because there is a very big financing need in the region," ADB President Takehiko Nakao told reporters.
But he said he was still awaiting details about the bank such as membership, shareholdings, the location of its headquarters and who will head it.
The Japanese government has expressed concern, while the United States is reportedly fiercely opposed to the AIIB.
Xi was reassuring after the signing. "For the AIIB, its operation needs to follow multilateral rules and procedures," he said.
"We have also to learn from the World Bank and the Asia Development Bank and other existing multilateral development institutions in their good practices."
The MOU signatories will negotiate the bank's specifics in the coming months and expect to finish by the end of next year, according to a statement from Singapore's finance ministry.
World Bank President Jim Yong Kim said in July that estimates for infrastructure needs in developing countries are at least $1 trillion annually, far beyond the current capacity of his institution and private investment to handle.
"We think that the need for new investments in infrastructure is massive and we think that we can work very well and cooperatively with any of these new banks once they become a reality," Kim told reporters in Beijing.