A train departs from Erenhot in North China's Inner Mongolia Autonomous Region. Photo: IC

Australia's federal cabinet has approved the signing of a memorandum of understanding (MOU) on joining the $100 billion Asian Infrastructure Investment Bank (AIIB) led by China, the Sydney Morning Herald reported Tuesday.

A final decision on joining the AIIB will still be "subject to the structure of the bank and certain governance conditions being met," the report said.

By press time, Chinese authorities had not commented on the report.

Australia is the 34th major economy to announce its intention to join the AIIB as a founding member, with the others including the UK, Germany, France, Italy and Switzerland.

Thirty-five economies, and possibly more, are expected to become AIIB founding members ahead of the March 31 deadline, Jin Liqun, secretary-general of the Multilateral Interim Secretariat for Establishing the AIIB, told a forum in Beijing on Sunday.

"Australia's decision [to approve signing of the MOU] was expected, as the country has close economic ties with Asia and its future growth will largely rely on the Asian market," Huang Wei, an expert at the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, told the Global Times on Tuesday.

Experts said that Australia's intention to join the AIIB will have an effect on Japan and South Korea, which, as close allies of the US, have not yet made up their minds on whether to join the AIIB.

Japanese Finance Minister Taro Aso said Tuesday that Japan was not ready to make a decision on whether to join the China-led bank by the March 31 deadline, Reuters reported.

But other media reports on Tuesday said that South Korea's decision could come as early as this week.

Experts noted that it would be in their long-term interest to join the bank. "It is quite possible that the two countries [Japan and South Korea] will join in the end," Huang said.

Bloomberg reported Tuesday that Canada is also weighing the possibility of joining the AIIB.

China has offered to forgo veto power at the AIIB, which has been a critical factor in attracting major European countries to join the bank, the Wall Street Journal reported on Tuesday. Jin also told the forum on Sunday that the bank will seek to make decisions on the basis of unanimous agreement rather than voting share.

Chen Fengying, a research fellow at the China Institutes of Contemporary International Relations, said that China will not seek to control the AIIB in the same way that the US has sought to dominate the IMF. "Consultation will play an important role in decision-making at the AIIB," she said.

The AIIB, initiated by China in October 2014 to boost infrastructure investment in Asia, is expected to be established by the end of this year.

Though the bank has been seen by many as a move to shake up the international financial system, experts have noted that the bank will be complementary to existing financial institutions instead of a rival.

"Demand for infrastructure investment in Asia is huge and the AIIB will be a supplement to the Asian Development Bank in providing funds," Huang said, noting that it is not a "zero-sum" game.

The US, which used to have a negative attitude toward the AIIB, has softened its attitude recently.

"The US would welcome new multilateral institutions that strengthen the international financial architecture," Nathan Sheets, US Treasury undersecretary for international affairs, was quoted as saying by the Wall Street Journal on Sunday.

Chen said that huge investment opportunities in Asia are the main reason for major economies to join the AIIB.

"There is no way for the US to persuade its allies to back away from the bank now," she said.