04 September 2015
IN the three-round match between the US and China over influence in the Asian regional architecture, Round 2, which was played several months back, went in China’s favour. Countries such as Britain, South Korea and Australia broke ranks with the US and 57 countries from around the world including Germany, France, Iran, the United Arab Emirates and Nepal, and applied to be founding members of the Asian Infrastructure Investment Bank (AIIB). Japan has so far stuck to the US, but it has indicated that it remains interested in joining the AIIB ,which is the financing arm of China’s new “One Belt, One Road” policy.
Initially the US had attempted to dissuade potential applicants by citing poor governance and due diligence capacity at the proposed institutions. But it made a dramatic turnaround in mid-April when US Secretary of the Treasury, Jacob Lew, mentioned on a visit to Beijing that while Washington remained concerned about AIIB’s governance, there was “enough infrastructure need for the new and existing institutions”. He went on to add that the US would be willing to work with the AIIB through existing financial institutions such as the ADB (Asian Development Bank) and World Bank.
A few days later the World Bank’s US-appointed president vowed to find “innovative” ways to work with the AIIB and welcomed it as a “major new player” in the world of development finance. This is Round 2 of the humiliation of the US by China.
… The writer is associate professor and coordinator of the International Political Economy Programme in the Centre for Multilateralism Studies at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore. This was first published as a RSIS commentary
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Last updated on 16/11/2015