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Representatives of 21 Asian nations have convened in Beijing to inaugurate the Asian Infrastructure Investment Bank (AIIB), seen by some as a regional rival to the World Bank.
The Chinese-led initiative will be capitalised with $50bn (£31bn, €39.5bn), which will finance infrastructure projects within the region. China is set to put up half the capital required.
The countries present at the signing ceremony were: Bangladesh, Brunei, Cambodia, China, India, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, the Philippines, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan, and Vietnam.
The Chinese Finance Minister described the AIIB as "an open and inclusive institution". It will be headquartered in Beijing.
Notable absentees from the signing ceremony were the United States' closest regional allies, Japan, South Korea, and Australia, with media reports claiming the US had exerted pressure on the countries not to join up.
According to a report in the Australian Financial Review, the US Secretary of State John Kerry personally asked Prime Minister Tony Abbott not to join the bank, while Korean officials say they are "negotiating with China" over membership.
US State Department Spokesperson Jen Psaki denied the story, saying: "Secretary Kerry has made clear directly to the Chinese as well as to other partners that we welcome the idea of an infrastructure bank for Asia but we strongly urge that it meet international standards of governance and transparency."
Speaking at the ceremony, the Chinese President Xi Jinping said: "In China we have a folk saying. 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." He said the bank hoped to make its first loans in 2015.
China is also the driving force behind the New Development Bank - known colloquially as the BRICS Bank, after its member nations Brazil, Russia, India, China, and South Africa - which is also set to fund infrastructure projects to the tune of $50bn, with that capitalisation set to rise to $100bn.
Despite being the biggest recipient of World Bank funds, China has found itself unable to set the trade and economic agenda and, according to some commentators, feels frozen out of the big multilateral organisations such as the World Bank, IMF, and International Energy Agency (IEA).
"China wants to be a lender, as well as a borrower at concessionary rates, as this gives them policy influence over those countries to which it directs funds," Ben Steill, Director of International Economics at the Council on Foreign Relations (CFR) told IBTimes UK.
Perhaps in the immediate firing line of the AIIB is the Asian Development Bank (ADB) - a Western-backed multilateral lender which funds trade and projects across the region. The ADB President, Takehiko Nakao, has welcomed the AIIB saying that the infrastructure gap on the continent is vast and additional finance to plug that gap is welcome.
However, he has warned that the bank must meet environmental and social standards in its lending if it is to be accepted as part of the mainstream lending sector.
A senior ADB executive, who wished not to be named, told IBTimes UK in an email exchange: "Nakao-san is right to add this caveat to welcoming the new institution. This is a major concern that largely arises from criticism of Chinese export credits supporting transactions in Africa and elsewhere without any due regard for social safeguards.
"Social safeguards and standards (including labour and environment) have to be high for multilateral development banks. Aside from the prospect of doing more harm than good in supporting individual projects, the 'demonstration effect' is important. If the new institution doesn't get this part right, its creation may do more harm than good."
It's a commonly held view that China will attempt to use the bank to extend its political influence. In Africa, it has often been criticised for building roads in exchange for access to commodities. According to analysts, the AIIB could be used as a tool to bolster Chinese allegiances as it attempts to usurp the US as the dominant power in the region.
"On one hand, there's been talk of the AIIB being used to finance a lot of projects in South East Asia as part of the maritime Silk Road the leadership has been talking about," Erica Downs, Senior Analyst at the Eurasia Group told IBTimes UK.
"You could make a case for having Chinese companies build or finance projects through a multilateral organisation. This would be viewed in China as a way to legitimise their economic expansion in the area. It remains to be seen to what extent it is a pattern of behaviour of rewarding some countries for actions the Chinese like or withholding from others," she added.