The AIIB: making room for China in the global economy
- By Zhang Lijuan
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E-mail China.org.cn, April 20, 2015
If "made in China" has grown China, "led by China" will strengthen China. Although the Obama administration officially insisted that the United States welcomes China's rise and hopes that China can play a bigger role in regional and global affairs, the rhetoric has largely remained a hokum. China is seeking to sustain its bilateral relationship with the United States and is willing to learn how to become a more responsible player in international affairs.
To some extent, the AIIB is not a choice, but a necessity. The truth is, current financial institutions are not functioning well enough. In particular, there is a lack of support from the majority of developing nations. With 57 nations signing up for the AIIB, China's initiative is not just a fluke, but an alarming call for further reforms within the existing international financial institutions. Yes, it is true that China has many challenges in its domestic economic and social development, but it is also true that if China is determined to take a role in the international arena, China will do it.
China insists that the AIIB is a supplement to and not a replacement for the Asian Development Bank (ADB) and the World Bank. Indeed, there is a wide range of issues that the AIIB, the ADB and the World Bank can cooperate with each other to address. By coordinating with and co-financing well with other international financial institutions, the AIIB's complementary rather than competitive status with existing institutions can be ensured.
To assure the AIIB functions well, China needs to map out a clear mechanism for managing and coordinating its foreign aid projects and AIIB investment programs. Historically, foreign aid has served as a diplomatic and humanity policy tool. It has helped poor countries in many ways, but scholars have argued in recent decades that foreign aid is becoming more ineffective in supporting domestic economic growth. Some have even argued that it is damaging to a nation's economic capacity building. With the AIIB, China should also restructure its foreign aid policy to achieve desired goals.
Besides, the Chinese experience in the past three decades has proven that external pressure is crucial to China's further reform. The AIIB may also serve as a very strong, but positive, external pressure to overcome China's internal political obstacles to further economic, trade and investment liberalization, such as currency internationalization, capital control deregulation, business globalization and financial marketization.
China is a strong believer in learning by doing. The Chinese central government is confident to lead, to learn and to experience. Meanwhile, China recognizes the challenges ahead in managing the AIIB. At the core, China must build mutual strategic trust with AIIB members. With 57 members on board, the AIIB has provided a platform for China to work with all members as stakeholders with shared interests and responsibilities.
The world is watching China again. Let us all hope China's fight is not just for a better playing field, but also for a more level playing field. Inevitably, the world needs to make some room for China in the global economy. If the United States cannot act timely, then China has no choice but to make its own way. The creation of the AIIB is a good example.
The author is a columnist with China.org.cn. For more information please visit:
http://www.china.org.cn/opinion/zhanglijuan.htm
Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.
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