Russia, Australia, Netherlands to join AIIB

A late surge among top European countries, including Germany, France, Britain, and now Russia along with Australia to join the China-led Asian Infrastructure Investment Bank (AIIB), has imparted a new sense of realism to Beijing’s Silk Road plans.

If implemented, they are likely to shift the global balance of economic power towards Eurasia.

On Saturday, Russia, Australia and the Netherlands, announced its decision to join the China-led AIIB. The decision of key European powers along with South Korea to join the bank, overriding strong objections from the United States, has split the Atlantic Alliance on this issue.

“I would like to inform you about the decision to participate in the AIIB,” which was made by Russian President Vladimir Putin, said Russian Deputy Prime Minister Igor Shuvalov during the annual meeting of the Boao Forum for Asia (BFA) — China’s Davos-style meeting of top decision makers that takes place in Hainan island, in the country’s south.

Mr. Shuvalov said that Moscow welcomes China’s Silk Road Economic Belt initiative and is happy about stepping up cooperation.

The Russian Minister was referring to China’s “One belt One road” initiative, which envisages connecting the Pacific coast with Europe by an extensive transport, cyber and energy network along the Eurasian corridor. Inter-linked with the land route, China wants to establish the 21st century Maritime Silk Road (MSR) , which would connect China with a string of ports, from where would radiate economic corridors, in Southeast Asia, South Asia, West Asia and Africa. The MSR would terminate in Europe.

In his inaugural address at the BFA, Chinese President Xi Jinping advocated in reference to the AIIB, the “creation of a regional hub for financial cooperation,” apart from strengthening “pragmatic cooperation in monetary stability, investment, financing, credit rating and other fields”. He also spoke about the emergence of a multi-polar world.

The AIIB’s apparent success has now brought into sharper focus China’s ‘One belt One Road’ initiative which requires massive investment, including finance from the $40 billion Silk Road fund, which the Chinese have separately established.

In order to ensure that there are no funding shortfalls, an action plan released on Saturday by the Chinese government has asked countries along the Belt and Road to ensure that currency swap arrangements for payments are encouraged, and a bond market in Asia is fully developed.

Analysts point out that the ‘One Belt One Road’ initiative, backed by a solid financial institutional network, once implemented, is expected to accelerate the shift of geo-economic power away from the United States, towards Eurasia. More than 4.4 billion people, or 63 per cent of the global population countries, are expected to benefit from China’s game-changing plans.

The ‘One Belt One Road’ initiative, backed by a solid financial institutional network is expected to accelerate the shift of power away from the U.S. towards Eurasia.

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