Australia signs on the Asian Infrastructure Bank's dotted line

The Australian Government has decided to join the Asian Infrastructure Investment Bank, just in time to qualify alongside 56 other founding members. Treasurer Joe Hockey will travel to Beijing next week to sign on.

The AIIB, an initiative of the Chinese government's top leadership, will have paid-in capital of US$20 billion ($A25 billion) with total authorised capital of US$100 billion (A$126 billion).

"Our commitment [to the AIIB's balance sheet] will be $4.7 billion, of which around $930 million will be paid upfront; the rest will be callable capital," Treasurer Hockey told Sky News in an interview yesterday.

That makes Australia the AIIB's sixth biggest shareholder, although not big enough to command a board position, "but we are in discussions with New Zealand, Singapore and a number of other countries about setting up a pool of shareholders that ensures that we have a very regular seat at the table," Hockey said.

According to Treasure Joe Hockey, the decision in Cabinet was unanimous, albeit one that took time to negotiate, while placating the American and Japanese governments.

"We've been involved in intense negotiations with the Chinese and other potential founding members. We are absolutely satisfied that the governance arrangements now in place will ensure that there is appropriate transparency and accountability in the Bank," Hockey told Sky News.

Voting on which projects to back is to be based on factors such as population and GDP.

The move opens the way for a time of competitive tension between the world's major development funding vehicles, with the US-influenced World Bank and International Monetary Fund likely to be closely watched, with America and its allies Japan and Canada yet to sign up to the AIIB.