The China-initiated Asian Infrastructure Investment Bank (AIIB), a complement to existing international financial system, was formally established Friday in Beijing and expected to start operation early next year.

"The AIIB is legally established as the Articles of Agreement take effect today," said Lou Jiwei, China's Minister of Finance.

The Articles of Agreement outlines the financial share of each founding member as well as rules for policymaking, governance structure, and business and operational systems for the bank. It became effective once the legislatures of 17 members, who hold a combined 50.1 percent stake in the bank, ratified the agreement.

As long as at least 10 signatories, and no less than 50 percent of the capital contribution, obtain legislative approval, the agreement will become effective.

The establishment of the AIIB marks a milestone in the reform of global economic governance system, Lou said.

The AIIB will be operational after board of directors and executive council meet for the first time. The meetings are slated to run from Jan. 16 to 18 in Beijing, according to Lou. The bank's president will be officially appointed and the management team will be in place at the meetings.

The bank will start recruiting new members, Jin Liqun, the bank's president-designate, said in an interview with Xinhua, adding that members of the International Bank for Reconstruction and Development and the Asian Development Bank (ADB) could apply to join the AIIB.

The bank will always be open to new membership, Jin said.

The bank, headquartered in Beijing, now has 57 members.

China, India and Russia are the three largest shareholders, taking a 30.34 percent, 8.52 percent, 6.66 percent stake, respectively. Their voting shares are calculated at 26.06 percent, 7.5 percent and 5.92 percent.

"China is not deliberately seeking a veto power," its stake and voting share in the initial stage are the "natural outcome" of current rules, and may be diluted as more members join, China's Vice Finance Minister Shi Yaobin said in an interview with Xinhua.

As its name suggests, the AIIB will finance infrastructure -- airports, mobile phone towers, railways and roads -- in Asia.

There is a yawning infrastructure funding gap in Asia. The ADB pegged the hole with about 8 trillion US dollars between 2010 and 2020.

While both the ADB and World Bank focus on a broad range of development programs including agriculture, education and gender equality, the AIIB will concentrate on infrastructure alone. The International Monetary Fund, World Bank and ADB have all welcomed the AIIB initiative and see room for collaboration.

With authorized capital of 100 billion dollars, the AIIB will initially prioritize investment in energy, power generation, transportation, rural infrastructure, environmental protection and logistics. It is expected to offer loans to the first batch of projects in mid-2016.