Major European Nations Join Asian Infrastructure Investment Bank (AIIB)

March 17, 2015

The China-initiated Asian Infrastructure Investment Bank (AIIB) is becoming more and more clearly a central institution for global economic progress and growth in the decades ahead.

Following the British decision March 12 to become the 28th founding nation of the AIIB, other countries which had been forced by Obama Administration threats and pressure to stay out of the development bank, have joined or are rethinking doing so.

The Financial Times late yesterday reported:

"According to European officials, France, Germany, and Italy have all agreed to follow Britain's lead and join a China-led international development bank ... delivering a blow to Obama Administration efforts to keep leading western countries out of the new institution."

The newspaper reported that Britain "tried to gain 'first-mover advantage' last week by signing up ... before other G7 members."

Australian Prime Minister Tony Abbott said at a press conference March 15 that Australia will decide within weeks whether to join the AIIB. Abbott was quoted as saying in The Australian daily:

"I note that the U.K. has indicated an intention to sign up for the negotiations, the New Zealanders before Christmas signed up for the negotiations, the Singaporeans likewise, the Indians likewise. We're looking very carefully at this and well make a decision in the next week or so."

The Korea Times reported yesterday that the South Korean government will decide within days.

We welcome the active participation of the United States and other relevant countries so that together we can promote and share prosperity and peace in Asia Pacific. China is ready to work with the United States... and with unwavering spirit and unremitting efforts, we will promote new progress in building a new model of major-country relations between the two countries, so as to bring greater benefits to our two peoples and two countries.
— Chinese President Xi Jinping • November 12, 2014

Earlier March 16, the Financial Times had carried a lengthy op-ed by Peterson Institute director emeritus C. Fred Bergsten, saying the United States should join, as it has been invited to do by Chinese President Xi Jinping. Peterson Institute has been known for two decades in Washington for forecasting disasters and breakups for the Chinese economy. But now Bergsten's view is titled, "U.S. Should Work with the Asian Infrastructure Investment Bank," and subtitled, "Washington Should Sign Up and Bless the Desire of Its Friends To Join."

Bergsten writes that the AIIB initiative has "become a source of major discord between the US and some of its chief allies, including the UK, which has decided to become a founder member of the new institution."

The U.K. decision to join AIIB, Bergsten wrote:

"...sparked an angry response in Washington, a sorry development that reflects the huge mistake the U.S. has made in opposing a bank aimed at helping to meet Asia's need for trillions of dollars of investment in energy, power, transportation, telecommunications and other infrastructure sectors.... The U.S. should reverse course. It should join the bank and persuade Congress to provide the small amounts needed to fund a minority share. It should bless the desire of its friends in Asia and Europe to join."

Bergsten states that the UK and other US allies "are wise to accept China’s invitation to join" the AIIB, which he states can "play a positive role in the world economy and capitalise on China’s growing willingness to exercise constructive global leadership."

China itself will release its implementation plan for hundreds of major infrastructure projects along the Silk Road "Belt and Road" at the Boao Forum for Asia March 26-29, Xinhua reports. The annual Boao Forum's theme this year is "Asia's New Future: Towards a Community of Common Destiny."

Xinhua reported:

"Sources told Xinhua that the implementation plan will include a detailed list of major infrastructure projects concerning railways, roads, energy, information technology and industrial parks to be started in the coming years. The number of these major infrastructure projects could reach hundreds and will spread across Kazakhstan, Kyrgyzstan, Tajikistan, Pakistan and China's other neighboring countries, said the sources. Xinjiang (China's western province), located in the center of Asia, is the gateway to the Silk Road, and it will play an integral role in China-Europe exchanges."


SEE "The New Silk Road Becomes the World Landbridge"

During a press conference on November 12, 2014 at the APEC summit, Chinese President Xi Jinping personally offered President Obama the opportunity for the United States cooperate with China and become a founding member of the AIIB along with other Western countries, an offer which the United States has thus far failed to reciprocate despite all other leading Western countries deciding to join:

The Pacific Ocean is broad enough to accommodate the development of both China and the United States, and for our two countries to work together to contribute to security in Asia. These are mutually complementary efforts instead of mutually exclusive ones. China and the U.S. should continue to enhance dialogue and coordination on Asia Pacific affairs, and respect and accommodate each other’s interests and concerns in this region, and develop inclusive coordination....

We welcome the active participation of the United States and other relevant countries so that together we can promote and share prosperity and peace in Asia Pacific. China is ready to work with the United States to make efforts in a number of priority areas and putting into effect such principles as non-confrontation, non-conflict, mutual respect, and win-win cooperation. And with unwavering spirit and unremitting efforts, we will promote new progress in building a new model of major-country relations between the two countries, so as to bring greater benefits to our two peoples and two countries.

Chinese President Xi Jinping, November 12, 2014


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Great Britain Applies to Join the AIIB

On March 12, Great Britain applied to join the AIIB (Asian Infrastructure Investment Bank). Britain's Chancellor of the Exchequer George Osborne announced the decision in a Treasury release, noting that Great Britain is the "first major Western country to apply" to become a member of this new international development bank. A dispatch by Xinhua noted that China's Finance Ministry welcomed the initiative, which would make Britain a founding member. The Ministry is now seeking the opinions of other founding countries.

At a March 6 press conference, Lou Jiwei, China's Minister of Finance, said that 27 countries have applied to jointly found the bank. March 31 is the application deadline. Xinhua reports that the bank is to be formally established by the end of 2015. Lou said said that a number of European nations have shown interest to join the bank.

Within hours of today's announcement of Britain's application to the AIIB, reports came out of White House disapproval. The Financial Times reported that:

"The Obama administration accused the UK of a 'constant accommodation' of China after Britain decided to join a new China-led financial institution that could rival the World Bank..."

The article stated:

"A senior US administration official told the Financial Times that the British decision was taken after 'virtually no consultation with the US'... We are wary about a trend toward constant accommodation of China, which is not the best way to engage a rising power..."

The official British Treasury release states:

"As the first major Western country to apply to become a prospective member of the AIIB, the U.K. will join discussions later this month with other founding members to agree with the bank's prospective Articles of Agreement, setting out the governance and accountability arrangements that underpin the AIIB's operating practices."

Chancellor of the Exchequer George Osborne is quoted:

"This government has actively promoted closer political and economic engagement with the Asia-Pacific region and forging links between the U.K. and Asian economies to give our companies the best opportunity to work and invest in the world's fastest growing markets as a key part of our long-term economic plan. Joining the AIIB at the founding stage will create an unrivalled opportunity for the U.K. and Asia to invest and grow together."

Once fully operational, the AIIB will support access to finance for infrastructure projects across Asia, using a variety of support measures — including loans, equity investments, and guarantees — to boost investment across a range of sectors including transportation, energy, telecommunication, agriculture and urban development.

                                                                                                                                                                                                                                                                                        

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