China is in the process of launching a new international financial institution by the end of this year. It will be called the Asian Infrastructure Investment Bank, or AIIB for short.
It will look to help modernize through funding the infrastructure of many of Asia’s developing countries. This institution will fit nicely with China’s strategic goals of playing a stronger leadership role in the region and promoting economic development across the board.
There is just one problem. The United States doesn’t seem to like it. From the beginning, the U.S. has been skeptical of the oversight and the transparency of the bank. Not to mention the fact that the creation of this new bank will overlap with some of the functions of the International Monetary Fund, the World Bank and the Asian Development Bank — all three of which happen to be Western-dominated, interestingly enough. There are many who speculate the U.S. is weary of having a Chinese-led rival that might disrupt the region and counter American interests.
So the U.S. has been vocal about its concerns, and historically, that would be enough for our Western counterparts and Asian allies to follow suit. However many Western countries have defied the United States’ position. To name just a few, Germany, Italy, Luxemburg, France and, most surprisingly of all, Great Britain have all applied to be founding members of the bank, and there could be more before the March 31 deadline.
South Korea is also weighing a membership bid — an indication it may be considering a pivot toward cooperation with China rather than the U.S. in the region down the road.
To make matters worse, International Monetary Fund Director Christine Lagarde issued a statement in Beijing in support of the creation of the new bank and pledged a willingness to cooperate with it. This is quite a different stance than we thought they would take. So where does that leave us? And why should we care?
I have written before about the growing power of China and the seeming unpreparedness on our part. The world is changing rapidly, and time and time again we find ourselves behind the eight-ball. My fear is, as we lose our influence either justifiably or unjustifiably, we respond poorly and increase the divide between us and much of ?the world.
If American influence is waning around the world, it is going to take serious work to redefine our foreign policy and our national identity. For several decades, we have held the privileged position of the sole super power. Whether we like it or not, that has affected how we view the world and other nations.
I am extremely proud of role the U.S. has played in shaping and leading the world, and my hope would be that this continue. But if not, we need a quick rethink of how we interact with the emerging powers in the world who have a thirst for influence and are determined to ?quench it.
cgerst@indiana.edu
