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[WSJ] Decision to join China-led bank tests South Korea’s ties to US

March 24, 2015

[THE WALL STREET JOURNAL] – A decision over whether to join China’s new development bank is a fresh test of South Korea’s ability to balance warming economic ties with Beijing and its security alliance with the U.S.

While analysts widely expect Seoul to join the Asian Infrastructure Investment Bank before the end of March, the deadline to become a founding member, it is weighing the economic benefits and “diplomatic circumstances,” a government official involved in the decision told The Wall Street Journal on Tuesday.

Key U.S. allies have signed up to support the new Chinese-led development fund, against Washington’s wishes. Australia was poised to become the latest U.S. ally to voice its support of the bank, with a Cabinet source saying a decision could be announced as soon as Wednesday.

South Korea’s caution reflects concerns from Washington that the bank may be used by China as a way to exert influence in the Asia-Pacific region, potentially weakening U.S. alliances there—an issue that’s particularly important to Seoul. [READ MORE]