Australia has become another U.S. ally to become a founding member of a
China-led infrastructure bank, contributing 930m
Australian dollars ($718.5m) over five years.
The decision will make Australia the sixth biggest shareholder of the Asian Infrastructure Investment Bank (AIIB).
Australia's Treasurer Joe Hockey said that the decision to join "comes after extensive discussions between the government, China and other key partners around the world."
More than 50 members have signed up to the lender, which is widely seen as a competitor to the Western-led World Bank.
Earlier, the Financial Times said that the rush to the AIIB was embarrassing for Washington, as the country initially tried to dissuade applicants, citing potential governance issues at China's bank. Those seeking founding-member status, however, include traditional US allies the UK, Australia, South Korea, Taiwan, France and Germany.
The US and Japan still refuse to join the institution.
Both countries have expressed worries about the bank's standards of governance, while there are concerns in the US that the AIIB could be used by China to extend its political influence.
The aim of the Beijing-based bank is to
help finance construction of roads, ports, railways and other
infrastructure projects in Asia.
"The governance of the AIIB will be based on best practice, ensuring that all members will be directly involved in the direction and decision making of the bank in an open and transparent manner," Mr Hockey commented adding that the AIIB would have paid-in capital of $20bn, "with total authorised capital of US$100bn".
The bank would provide Australia with significant opportunities to work with the neighbours and Australia's largest trading partner to drive economic growth and employment, Mr Hockey said.
