Shorten urges govt rethink on China bank

Opposition Leader Bill Shorten believes Australia should not be too hasty in dismissing China's new infrastructure bank.

Twenty other countries have signed a memorandum of understanding to set up the $54 billion Asian Infrastructure Investment Bank aimed at addressing a multi-billion-dollar funding gap for dams, ports, roads and other capital works across the region.

Australia, the US, Japan and South Korea have declined the invitation.

Mr Shorten understands the US and other countries have concerns over governance.

"But we have to pursue Australian foreign policy not be the deputy sheriff of any other country in the region," he told reporters in Melbourne.

Governance had to be right, Mr Shorten said, but there was a need to think carefully before rejecting an invitation to be in at the ground level.

Prime Minister Tony Abbott needed to clear up obvious divisions between Treasurer Joe Hockey and Foreign Minister Julie Bishop on the issue, he said.

It was possible for Australian foreign policy to maintain its strong, traditional historical alliance with the US while working with the emerging nations of Asia, especially China.