Opinion     

AIIB not aimed at challenging US

China Daily, April 1, 2015

• The top concern of the US, which is the only country to openly oppose the AIIB, is that it might lose the global financial leadership after China gets the veto power in the AIIB. Yet China has proposed that no single member should be empowered to decide for the entire bank. In contrast, the US has been charting most of the vital decisions of the World Bank and the International Monetary Fund despite holding less than 20 percent voting stakes in the two global financial institutions.

  The global financial crisis of 2008 was a tipping point that accelerated the geo-economic shift from the West to the East where China plays a major role given its more than $10-trillion GDP. To consolidate the Asian economy’s growing economic power, China has no choice but to contribute the lion’s share of the AIIB’s capital. And it’s for reasons other than regional economic development — especially to maintain their geopolitical dominance — that the US and Japan are opposing the establishment of the AIIB.

  Rather than disrupting or sabotaging the existing global financial order, the AIIB is expected to work closely with existing multilateral development banks by providing sufficient financial support for Asia’s infrastructure projects. Unlike the World Bank and the ADB, which are aimed at reducing poverty yet not financially sound to support large-scale infrastructure projects, the AIIB will focus on the latter and play a complementary role in the world economy.

  Therefore, Washington should abandon its economic stance that is based on the Cold War mentality and stop seeing the AIIB as a challenge to its interests in Asia.

  The author is a researcher at the Institute of World Economics and Politics, Chinese Academy of Social Sciences.

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