AIIB closes Asian funding gaps
- By Mitchell Blatt
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E-mail China.org.cn, October 3, 2015
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Dreaming together [By Jiao Haiyang/China.org.cn] |
Xi Jinping's visit to the United States coincided with an article in the September 26th edition of The Economist about China's new Asian Infrastructure Investment Bank (AIIB) -- one of many issues on which the United States and China have disagreed, albeit without the passion generated by cybersecurity and military issues.
The United States, fearing that bank could be used to promote Chinese power at the expense of other international banks led by the U.S. and Japan, tried unsuccessfully to lobby other countries to stay out. Ultimately, however, America's best allies ended up joining, with only Canada and Japan holding out. The U.S., impotently, had to resort to verbal attacks, such as that against the U.K.'s "constant accommodation" of China.
However, the climate is changing. Developments, along with arguments from President Xi Jinping in his interview with the Wall Street Journal, suggest the AIIB will likely be just another bank offering funding to a fast-growing Asia, rather than a competitor in a zero-sum game.
The Economist attributes much of China's success in attracting Western countries to the bank's deputed leader, Jin Liqun. Described as having a "relaxed demeanor" and speaking "fluent, colloquial English," Jin has been nominated by China to serve as the first president of the AIIB, after serving as its interim president since the concept first emerged. He has served as vice president of the Asian Development Bank, so has the right credentials.
The magazine noted a shortfall in funding for Asian infrastructure, even with involvement of the World Bank and Asian Development Bank. A common figure cited is that Asia will need US$8 trillion in infrastructure investment by 2020. As Xi said, this leaves an annual shortfall of US$800 billion.
"The AIIB serves as a new option to meet this shortfall, so is welcomed by both Asian countries and the wider international community. However, as the funding shortage is huge, it is clear the AIIB alone cannot possibly meet such demand. As an open and inclusive multilateral development agency, the AIIB will complement other multilateral development banks. In addition to Asian countries, countries outside Asia such as Germany, France and the U.K. have also joined the AIIB," Xi told the WSJ.
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