news from The Telegraph

The China-backed Asian Infrastructure Investment Bank (AIIB), viewed by some as a rival to the World Bank and Asian Development Bank, was formally established on Friday, according to a statement issued by Beijing

The United States and Japan - the world's largest and third-largest economies, respectively - have notably declined to join the bank, which is expected to begin operations early next year, though others such as Australia, Germany and Britain will take part.

The bank's establishment came after 17 funding members of the AIIB, which account for just over 50pc of its share capital, ratified an agreement on the bank, state television quoted Finance Minister Lou Jiwei as saying.

"The AIIB is legally established as the Articles of Agreement take effect today,” said Mr Lou said.

"The establishment of the AIIB marks a milestone in the reform of global economic governance system."

Despite the opposition of Washington, major US allies such as Australia, Britain, Germany, Italy, the Philippines and South Korea have joined.