AIIB emerges at the right time

By Zheng Yongnian
0 Comment(s)Print E-mail People's Daily, May 27, 2015
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[By Xu Jun/Xinhua]

For rebalancing of the global economy, the world needs a new source of growth. In this regards, the AIIB has emerged just at the right time.

Considering the evolution of the world economy, a country, either a developing or an industrialized one, the primary reason for joining the Asian Infrastructure Investment Bank (AIIB) is to achieve its own development.

The world economic recovery has been insufficient since the financial crisis in 2008. Every country wants to see its economy recover. Though various efforts have been made, no truly effective approach to the problem has been found. That is mainly because of the unbalanced nature of the world economy. This disparity not only exists between western and eastern countries, but also between the north and the south. And the income gap is widening.

For the world economy to be rebalanced, a new growth point is needed. The AIIB has emerged at just the right moment. Firstly, the AIIB has identified a new growth point - the developing countries. Secondly, China is a driver of this new growth. China has accumulated rich experience in technology and capital operation in infrastructure development, which will play a key role in the future progress of developing countries.

China suggests the AIIB should be open and inclusive. Since many developing countries have an urgent need to boost their economy, they welcome the AIIB. Nor do the western countries see any reason to reject it, as it offers a great opportunity to take part in the economic development of the developing countries. Britain, France, and Germany have all chosen to join the AIIB because they expect that Asia will be the most important growth area in the long term.

If the AIIB runs well, it will promote the continuous growth of the Asian economy. When Asia starts its large-scale infrastructure construction, every country - including the US - will turn its economic focus on Asia.

There is no doubt that the AIIB must adhere to a more open and inclusive principle if it wants to become a better international financial organization than the existing ones, which are steered by the western countries. China is the initiator of the AIIB, but not the dominator. In the future the AIIB must operate on the basis of equal consultation. It should embody greater democracy and equality.

The author of this article is Zheng Yongnian, director of the East Aisan Institute of National University of Singapore.

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