The Power of the New China-Led Investment Bank

The US “pivot” to Asia hit turbulence with a decision by the UK to join the China-led Asia Infrastructure Investment Bank as a founding member. Previously, the US had led an effort to boycott the AIIB among European allies and key allies in Asia-Pacific including Japan, South Korea, and Australia. Though officially based on doubts regarding the AIIB’s investment standards for governance, environmental regulations and social safeguards, the boycott also reflected a US attempt to decelerate China’s growth in power. UK diplomats countered that western powers should participate in the AIIB to ensure safeguards and to engage Chinese diplomacy and Germany, France, Italy, and Australia soon followed. Analyst Richard Javad Heydarian, writing for Al Jazeera, attributes the AIIB’s rise as a response to the US Congress’s refusal to reform the International Monetary Fund and the World Bank to reflect the rise of the emerging economies known as the BRICs. Heydarian concludes, “Washington has been eclipsed by China's emergence as the economic pivot of Asia.” – YaleGlobal