By Darren Lim
‘If it wants to lead, China needs to convince its neighbours that it doesn’t pose a threat to their fundamental security interests.’
Recently the growing rivalry between the United States and China seems to be spilling over into the economic and institutional arenas. The U.S. is leading the push for the Trans-Pacific Partnership, a new regional free-trade agreement which excludes China. And Beijing appears to be implementing a new strategy for transforming its own economic strength into regional leadership.
Whereas China previously used bilateral channels to build relationships and acquire influence, it’s now leading multilateral initiatives, headlined by the US$50 billion Asian Infrastructure Investment Bank and US$40 billion Silk Road Fund—the latter planning to build a network of trade-and-transport infrastructure linking China to Central and South Asia, the Middle East and Europe. Those initiatives have the potential to eclipse the World Bank and Asian Development Bank as the dominant multilateral lending institutions in Asia, shaking the foundations of the regional order set up by the United States following World War II.
Beijing is also pushing back on the multilateral trade front, securing an agreement from APEC leaders for a two-year study of a Free Trade Area of the Asia-Pacific. The FTAAP could become a direct competitor to the Trans-Pacific Partnership, the central economic component of the Obama Administration’s rebalance to Asia.
Read the full story at The Diplomat