After China’s notable political success in registering more than 35 applicants for funding membership of the yet to be launched Asia Infrastructure Investment Bank (AIIB), some important issues remain to be addressed that will determine the long term success of the new institution.
Scope of intervention: China-centric or Asia-focused? It is no coincidence that the set-up of the bank comes at the same time Beijing is rolling out its “one road, one belt” action plan. The revival of the Silk Road is part of the charm initiative aiming at winning greater consideration from neighboring countries as much as fostering trade relationships.Setting up a multilateral development bank is a broader initiative, driven by the growing role of Asia in the world economy, the loss of legitimacy of Washington-based institutions and the will to deepen economic and political relationships within the region.
In that sense, the AIIB cannot and should not be restricted to the promotion of China’s self-interest although it will obviously contribute to enhancing its soft power. In that sense, the likely choice of Beijing as the bank’s headquarters only mimics the choice of Washington for the Bretton Woods institutions (International Monetary Fund and World Bank). Also, AIIB voting rights are likely to be based on GDP which will provide a stronger voice for China than the meager 3.81 per cent held at the IMF.