Close allies of the USA such as Australia and South Korea have refrained from joining the Asia Infrastructure Investment Bank (AIIB) under U.S. pressure. They actually have been “disadvantaged” by their loyalty. Most likely, these and other countries in the Asia-Pacific will switch course and join the AIIB in due time.
The major European countries (UK, Germany, France and Italy) have announced that they are joining the AIIB.
Yes, $150 billion and $4 trillion more does buy global friends and influence
China has pledged $50 billion to launch the AIIB; $40 billion for the Silk Road infrastructure fund, which seeks to revive the trade routes that once connected China to the Mediterranean; $10 billion for the New Development Bank (also known as the BRICS Bank), which is co-founded with Brazil, Russia, India and South Africa; and $41 billion for a related BRICS Bank currency contingency fund.
China has also said that they will leverage their $4 trillion reserve to support global high speed rail, ports, airports, industry and nuclear energy projects.
X-World Bank President thinks the US administration does not have competence or proper focus on China
X-World Bank President Zoellick doesn’t believe Susan Rice, knows China well, has many connections in the country or is conversant in the combination of economics and security issues. Secretary of State John Kerry, meanwhile, is highly focused on the Middle East.
“Given the significance of China for security, economic, climate, political issues, you really need to see this as an integrated whole, and I don’t see where that occurs in the [Obama] administration,” he says.
USA picked the wrong diplomatic fight
America, however, has, either by design or ineptitude, turned the AIIB into a test of diplomatic strength. That has proved a disaster. Its officials have, anonymously, rebuked Britain for its “constant accommodation” of China—and many observers would agree they have a point. But the fact that its closest allies have proved keen enough for commercial advantage to flout American views suggests America chose the wrong fight to pick.
China’s triumph is not unalloyed, however. The accession of so many financially strong shareholders to the AIIB does indeed make it more likely that it will adhere to the same sort of standards that govern the World Bank and other international institutions. That is good for China’s hopes of getting a good return in its investment in the AIIB, but less so for any residual hopes that the bank might become an arm of Chinese foreign policy.
SOURCES – Wall Street Journal, Economist