Over 40 nations have lined up to join the new China-led Asian Infrastructure Investment Bank (AIIB). France, Britain, Germany, Australia and South Korea are among the interested countries despite American objections to the move, attesting to China’s growing global economic clout.
Taiwan, despite its historical animosity and lack of diplomatic relations with China, has also sought to join.
The AIIB is expected to start operating by the end of the year with $100 billion in capital.
Some suggest that the AIIB, seen as a challenge to the World Bank and Asian Development Bank, could supplant the US-dominated International Monetary Fund, which provides loans to struggling economies.
Washington expressed concern that the Chinese-led bank could mismanage international governance issues, leading to corruption.
“It is another step down the ladder of decline [for the United States],” said Jean-Pierre Lehmann, visiting professor at Hong Kong University and India’s NIIT University. “It is a colossal loss of face for Washington and also shows a worrying degree of incompetence.”
“In contrast to the strategy of earlier years, which consisted mainly of exports of manufactured goods, China is increasingly in the business of export of capital. From ‘made-in-China’ we are going increasingly to a scenario of ‘owned-by-China,’” Lehmann said.
“Countries that join are very much hoping to get a piece of the action, but also as a means of cuddling up to China in the expectation of collateral opportunities.”
Japan, also an absentee, remains cautious about signing up.