Want China Times, Staff Reporter 2015-03-19
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| The UK, Italy, France and Germany strain against Uncle Sam's bonds of "friendship" and "brotherhood" to get at a cake offered by China, with the word "benefits" on top. (Cartoon/CFP) |
An opinion
piece published on the official WeChat account of the overseas edition of the
Communist Party mouthpiece People's Daily has outlined the motivation behind
Beijing's efforts to set up the Asian Infrastructure Bank (AIIB).
Germany,
France and Italy have now followed in the footsteps of the United Kingdom to
apply to be founding members of the bank against the advice of the United
States, pushing the number of countries taking part in the initiative to 31.
Many
international news organizations have interpreted the AIIB as an attempt by
Beijing to challenge the status of the US in the international community. The
People's Daily commentary said China had no other option but to do so due to
the unequal treatment of emerging and developing economies in existing
institutions such as the IMF and World Bank.
After 2008,
the G8 countries — the US, UK, France, Germany, Japan, Italy, Canada and Russia
— came to the realization that their "wealthy nations club" was not enough
to save them from the effects of the global financial crisis and they needed to
include emerging and developing countries, including China, to sort out the
crisis, which led to the convening of the G20, the piece said. This had little
or no effect on the fundamental manner by which the world economy was governed,
as implemented by the IMF, the World Bank and the WTO, as the US and the G8
nations were still the dominant voices, the commentary said.
Attempts to
reform the IMF in 2010 by giving emerging and developing countries more clout
were blocked by the US, which left a gap in representation in the global
economy which China believes the AIIB can fill, the piece said.
Other
multilateral development funds in Asia have been unable to keep up with development
trends in the region and there has long been a need for a new organization to
resolve issues with the Asian and Chinese economies, the piece said.
The Asian
Development Bank has shown its political colors with the US "Asia
Pivot" strategy, the piece said, adding that the bank, founded in 1966 and
led by the US and Japan, is in decline and that it is inconsistent in the loans
it gives to Asian countries, making it difficult for some of them to get the
funds they need.
The piece
also said that the AIIB differs from the World Bank and the Asian Development
Bank in terms of its functions, as the latter two are aimed at reducing
poverty, whereas the former is aimed at building infrastructure and supporting
the social and economic development of Asian nations.
China also
likely hopes to benefit financially from regional infrastructural development,
including large-scale transnational highways and railway networks, the piece
said. China is currently capital rich, but there is not enough demand for
infrastructure projects domestically, so infrastructure investments in other
Asian countries are a good way to assert its influence in neighboring
countries, as well as finding a purpose for surplus funds.
According
to Asian Development Bank figures, Asian countries will require around US$8
trillion in infrastructure investment up to 2020, which will provide China with
good investment opportunities, according to the article. China has a great deal
of experience in infrastructure construction and this will likely mean a good
return on investment, the piece said.
If China
shares the dividends of its economic transformation it will also improve
relations between countries in the region, the piece said. Many countries in
the region are undergoing similar reforms to China, but they lack funds, skills
and experience, all of which China can help to provide.
The launch
of the bank will also lead to the further internationalization of the renminbi,
the piece said.
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