After Britain, Australia has also shown its interest in joining the Asian Infrastructure Investment Bank (AIIB), following G7 members like Germany, France and Italy.
South Korea, which once changed its mind under pressure from the United States, now also wants to join the AIIB.
What does the AIIB mean to China?
Similar global organizations, the World Bank and the Asian Development Bank, have been dominated by the United States and Japan, respectively.
In the World Bank, the United States and Japan have 15.85 percent and 6.84 percent of the votes respectively, followed by China, with 4.42 percent.
The US and Japan each owns a 15.65 percent stake in the Asian Development Bank, compared with China’s 6.46 percent.
In other words, China has little influence over the decisions of these two banks and can only follow the direction set by the US and Japan.
In establishing the AIIB, China is setting its own rules of the game and, at the same time, trying to gain support from emerging countries that are not happy with the existing system.
Meanwhile, China wants to strengthen its influence in Eurasia under the principle of “One Belt, One Road”.
To achieve its goal, China needs money to build infrastructure, and the AIIB will be a strong fundraising platform.
While attracting some rising economies to challenge the existing international banking system, the AIIB can also weaken the bonds among western countries.
In October, 21 Asian countries signed the Memorandum of Understanding on Establishing AIIB. Most of these countries are located along the routes covered by “One Belt, One Road”.
Some countries that are not members of the Asian Development Bank, like Saudi Arabia and Kuwait, signed the agreement as well.
With several major European countries joining too, the US can no longer ignore the expanding influence of the AIIB.
More importantly, the AIIB is not a stand-alone project.
It can be a part of China’s other global initiatives, such as the BRICS bank and the APEC free trade zone.
President Xi Jinping wants to come up with new game rules or a new system to challenge the existing international arrangements dominated by the US.
China has cleverly leveraged on a group of emerging countries in the region to challenge the US-led global order.
The AIIB will only be the beginning. More profound changes in the distribution of global power look very likely in the coming two decades.
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