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 multipolar 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. "We have been asking to ensure debt sustainability taking into account its impact on environment and society," he told reporters after a cabinet meeting. "We could [consider participating] if these issues are guaranteed,” he observed.
However, Reuters is quoting 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 — were first to break the shackles imposed by Washington against participation in the Beijing-led lender, which already 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 unipolar world had entered its sunset years. “China's bank is causing a landmark acceptance of the new multipolar world order and a willingness to work with, not against, it,” the daily observed.
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 slams the U.S. for being obstructionist. It points out that Washington has “correctly urged China to exercise leadership consistent with its expanding power and to provide more resources to support development and other global goals”. It adds: “When the Chinese move in those directions, as they are doing with the AIIB, it is short-sighted and hypocritical for the U.S. to seek to block them. This is especially true when the Obama administration has not persuaded Congress in four years to adopt legislation to provide enhanced roles for China and other emerging economies in the International Monetary Fund (IMF), as agreed by all other countries; and has opposed increasing the capital of the Asian Development Bank.”
Hoping to minimise resistance in Washington, Lou Jiwei, the Chinese finance minister has said that AIIB will complement and not compete with established international lenders, including the World Bank and the Asian Development Bank (ADB).
"History revisited, the establishment of regional investment banks including the ADB andthe European Bank for Reconstruction and Development did not weaken established [institutions], rather they reinforced the multilateral financial organisations and more vigorously push forward the global economy," observed Mr. Lou.
The Chinese finance minister said that although the deadline of founder application is March 31, other countries can still join the bank as common members after this date.
