Criticism of Japan, US for not joining China-led AIIB is misdirected
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About 50 nations have announced they will join the Asian Infrastructure Investment Bank (AIIB), an institution being spearheaded by China, the world's second-largest economy.
Japan and the United States have taken a cautious stance and opted to stay out for now. Despite this, four of the Group of Seven industrialised nations — Britain, Germany, France and Italy — and US allies South Korea and Australia have added their names to the list.
Joining the AIIB will increase opportunities to enter Asia’s infrastructure market, which is expected to see huge demand in the years ahead.
The nations that intend to join have apparently given priority to their expectations for economic profit, ahead of their diplomatic consideration for Tokyo and Washington.
Behind these moves is the widely held view that US leadership is on the decline.
Although the number of participating countries has increased, this does not mean that concerns have been eased over the possibility of China wielding overwhelming control over the operation of the AIIB, and using the bank for projects linked to its own national interests.
Chinese President Xi Jinping has indicated Beijing wants to create a China-led large economic sphere along “land-based and maritime Silk Roads” linking China with Europe.
Funds and loans from the AIIB are expected to be a major source of capital for this project.
China has a domestic surplus of commodities and laboUr force due to the slowdown in its economic growth.
Beijing likely wants to divert these resources to investments in infrastructure across Asia.
It is also probably motivated by a desire to continue its push for the internationaliSation of its yuan currency.
There are also significant diplomatic and national security misgivings about the bank. Does it have any intention of strengthening its influence over the nations in which it provides assistance for development?
China’s navy is quickening the expansion of its maritime presence. It cannot be denied that the AIIB could finance port and harbor improvements that enlarge ports of call for Chinese navy vessels.
China’s finance minister recently said, “Western rules are not necessarily the best.” It will be a problem if the AIIB intends to follow operating practices that differ from the World Bank and the Asian Development Bank, which attach great importance to human rights and environmental protection.
Both Japan and the United States have called on China to show how the bank will extend loans and screen applications.
However, no explicit response was provided, so they have been unable to eliminate their unease over the lack of transparency in the bank’s governance.
There has been criticism from some quarters that a “diplomatic failure” has left Japan and the United States isolated on this issue.
However, we think the decision by Tokyo and Washington not to join the AIIB at this point is reasonable, given the responsibility they hold in the international financial order.
At a time when China is attempting to unilaterally change the status quo in the East China Sea and other areas, it is increasingly necessary to strengthen the Japan-US alliance.
We hope Japan will steadfastly take concerted action with the United States.
The AIIB aims to settle on its operational rules and regulations in June, and could be launched before the end of the year.
US Treasury Secretary Jack Lew recently visited China, and called for the ADB and other existing international financial institutions to cooperate with the AIIB.
It is vital that Japan and the United States act in concert with other nations with a stake in this issue, and make efforts to encourage the AIIB to retain transparency and take actions in line with international rules.
