By Jin Kai
Is Washington determined to keep China isolated?
As AIIB awaits its official commencement later in 2015, more members are set to join. The new bank will China give the chance to have an more important role than it has been offered in other U.S.-led financial institutions.
Yet, why all the media furor over a new regional bank? AIIB has deeper political significance, because it is yet another multilateral platform where the United States could choose to engage an emerging China in view of the long-term power transition taking place in the current international system.
As The Boston Globe put it in a recent op-ed, “The United States should seek to accommodate that shift in a productive way, by enmeshing the world’s second-largest economy more deeply in multilateral bodies such as the World Bank, International Monetary Fund, and Asian Development Bank – three institutions over which the United States has long exercised outsize influence.” Obviously, to the West and especially to the United States, having China more integrated into the U.S.-led world financial system is a way to ensure a more cooperative China.
But the reality has been somewhat different, simply because China is not given much of a voice in these institutions. In the IMF, the voting shares of the United States, Japan, and China are set at 16.75 percent, 6.23 percent, and 3.81 percent respectively. According to reforms agreed to in 2010, China’s voting share could reach to about 6 percent but such reforms are not yet in effect. China also has less voting power [PDF] (5.4 percent) than Japan (12.8 percent) and the United States (12.7 percent) in the Asian Development Bank (ADB). Hence, Long Yongtu, who served as the chief negotiator for China’s entry to the WTO, commented that China was forced to start AIIB for two reasons: first, reforms of the world financial system have stagnated; second, Asian countries’ demands for infrastructure investment have soared significantly and that goes beyond the capability of current institutions like IMF and ADB.
Read the full story at The Diplomat