Complementarity between US-led and China-led institutions requires the ratification of the 2010 IMF governance reforms by the US Congress. As this is unlikely to happen any time soon, we need to start thinking of a New Bretton Woods.

In the three-round match between the United States and China over influence in the Asian regional architecture, Round 2, which was played several months back, went in China’s favour. Countries like Britain, 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 applied to be the 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, Jack Lew visited Beijing.

… Pradumna B. Rana 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.