Representatives from 21 Asian nations signed a memorandum of understanding on Friday to establish a China-backed international bank for Asia, according to media reports. However, a number of countries whose membership was sought by China, including Japan, South Korea, Indonesia and Australia, were reportedly absent from the ceremony in Beijing.

The Asian Infrastructure Investment Bank, or AIIB, which was proposed by Chinese President Xi Jinping in 2013, reflects China’s desire to counter the perceived hegemony of lenders like the World Bank and the Asian Development Bank, which emerging markets have come to regard as the preserve of developed nations of the West. According to media reports, China is expected to provide most of the initial $50 billion in capital for AIIB, which is relatively small compared to the World Bank's $220 billion and the ADB's $175 billion.

“We hope that through our joint efforts we can build the AIIB into a professional and efficient financing platform for infrastructure,” Chinese Finance Minister Lou Jiwei reportedly said during the ceremony, which was attended by delegates from countries like India, Singapore, Malaysia and Thailand.

The United States has opposed the creation of the bank because American officials feel it could work against the purpose of existing international banks by undermining lending standards. U.S. Treasury Secretary Jacob Lew, had, earlier this month, raised concerns about whether the proposed bank would adhere to international lending norms such as those followed by the World Bank.

“The critical question is, ‘Do they follow the same kinds of practices that are working to help economies grow and to maintain strong and stable foundations?’”Lew said, according to media reports.

However, Xi, speaking to delegates after the signing, sought to dispel these concerns. “For the AIIB, its operation needs to follow multilateral rules and procedures…we have also to learn from the World Bank and the Asia Development Bank and other existing multilateral development institutions in their good practices,” he reportedly said.

Heads of the World Bank and ADB also welcomed the move, reportedly stating that it would “substantially boost” the funding available to developing nations in Asia.