Is Infrastructure Bank China's new Marshall Plan for Asia?
Support for China's new Asian Infrastructure Investment Bank snowballed after Britain became the first major Western power to sign up as a founding member.
By the deadline tomorrow, the bank will have attracted more than 35 launch countries, including France, Germany, Italy, Luxembourg and Switzerland, as well as the original sponsors such as Thailand.
Such a strong showing is seen as a major victory for China, the architect of the bank and its major shareholder.
The proposal was opposed by the United States, which lobbied allies to boycott it for fear it might erode the influence of institutions such as the World Bank and IMF, so Britain’s throwing its hat in the ring for the AIIB came as a surprise.
Now not only have many other countries followed Britain but also the IMF and ADB have promised to work with the new multilateral bank.
One reason why Britain hopped on the bandwagon is that China is a huge export
and investment market and it can’t afford to sit on the side-lines. This also applies to Germany.
By joining in the bank’s establishment, they can help shape it and may even become directors. China also promised to implement globally acceptable standards and forego veto power at the new bank.
China’s success in cornering such cooperation is regarded by many Western observers as a major symbol of its growing pre-eminence on the global stage.
The New York Times said it would shift the balance of
power in the world, while the Economist said China will use the new bank to extend its influence at the expense of America and Japan.
“Transforming Asia”
A professor from Boston University, Kevin Gallagher, even described it as a 21st century Chinese Marshall Plan that will transform the face of Asia by helping to close the region’s funding gap, estimated at US$8 trillion (Bt261 trillion).
Projects that may be underwritten by the bank include high-speed railways linking Yunnan province to Southeast Asia; ports in Indonesia, Pakistan and Sri Lanka; and the new Silk Road across Central Asia to Europe.
Thailand will benefit from the enhanced connectivity and the economic kick to its neighbours.
The new bank is expected to start off with about $100 billion in registered capital – half contributed by China.
It is likely to collaborate closely with the $40 billion Silk Road Fund, the New Development Bank, otherwise known as the BRICs bank with capital of $100 billion,
and the China Development Bank, which is a policy bank owned by the Chinese government.
Besides improving linkages, it is expected to drive the development of green infrastructure in emerging countries.
The birth of the AIIB is definitely an important step forward and a sign that China is shaping an alternative universe – one that will underpin economic growth in our region.
