Pressure on Japan, U.S. to join Asian bank

With most allies already backing the Asian Infrastructure Investment Bank, sections in Western media are advocating U.S. participation

China's President Xi Jinping speaks during the BRICS 2014 summit in Fortaleza, Brazil, Tuesday, July 15, 2014. The leaders of the BRICS nations are meeting in Brazil for a summit where they are expected to officially create a bailout and development fund worth $100 billion. It's meant to be an alternative to the World Bank and the International Monetary Fund, which are seen as being dominated by the U.S. and Europe. (AP Photo/Silvia Izquierdo)

Japan now appears divided, and the United States is being strongly advised to join the China-led Asian Infrastructure Investment Bank (AIIB), whose formation is beginning to be viewed as the dawning of a multi-polar world.

Opposed to participation so far, the Japanese were emitting mixed signals about prospects for joining the bank. Japanese Finance Minister Taro Aso said Tokyo could consider participation in AIIB, provided a credible mechanism for providing loans could be guaranteed.

However, Reuters quoted a senior official in the ruling coalition that Japan’s participation “is not going to happen under the [Shinzo] Abe administration”.

The Australians appear close to dropping their earlier opposition, and are likely to formally announce their decision to join the bank, following a Cabinet meeting slated for Monday.

Major European powers — Britain, Germany, France, Italy, Luxembourg and Switzerland — have already broken the shackles imposed by Washington against participation in the Beijing-led lender, which earlier had emerging countries like India, as well as Singapore, Kuwait and Qatar in the list of founding members.

“The story of the Asian Infrastructure Investment Bank is turning into a diplomatic debacle for the U.S. By setting up and then losing a power struggle with China, Washington has sent an unintended signal about the drift of power and influence in the 21st century,” wrote the Financial Times .

In an editorial, the Hong Kong based South China Morning Post (SCMP) opined that the acceptance, however reluctant, of a Beijing-led bank meant that the uni-polar world had entered its sunset years. With most allies already backing, or in the process of doing so, influential sections of the Western media are arguing that instead of choosing confrontation, Washington too should join the AIIB. Another article in the Financial Times slammed the U.S. for being obstructionist.

Hoping to minimise resistance in Washington Chinese Finance Minister Lou Jiwei has said that AIIB will complement and not compete with established international lenders, including the World Bank and the Asian Development Bank (ADB).

Mr. Lou said although the deadline of founder application is March 31, other countries can still join the bank as common members after this date.