this March 23, 2015, photo, International Monetary Fund
Managing Director Christine Lagarde, second from left, talks
with Chinese Premier Li Keqiang, second from right, during a
meeting at the Great Hall of the People in Beijing. Lagarde
said Sunday that China's economic slowdown is legitimate and
that Beijing can contribute to global prosperity. U.S.
resistance to a Chinese-led Asian regional bank has left it
isolated among its Asian and European allies and given some
heft to China's frequent complaints that Washington wants to
contain its rise as a world power.
U.S. resistance to a Chinese-led Asian regional bank has left it
isolated among its Asian and European allies and given some heft
to China's frequent complaints that Washington wants to contain
its rise as a world power.
South Korea, one
of America's closest friends in Asia, announced Thursday it will
join the Asian Infrastructure Investment Bank, or AIIB, which is
intended to help finance construction of roads and other
infrastructure. Beijing has pledged to put up most of the initial
$50 billion in capital for the bank, which is expected to be set
up by year's end.
The U.S. has
expressed concern the new bank will allow looser lending standards
for the environment, labor rights and financial transparency,
undercutting the World Bank, where the U.S. has the most clout,
and the Asian Development Bank, where it is the second-largest
shareholder after Japan.
But since Britain
broke with Washington two weeks ago and announced it was signing
up for the AIIB, the floodgates have opened. France, Germany,
Italy and Switzerland quickly followed. On Wednesday, Prime
Minister Tony Abbott heavily hinted Australia would also join.
which has tense relations with China, is still holding out, the
Obama administration appears increasingly at odds with sentiment
in the very region where it has striven to forge closer ties for
the past five years. India and all 10 members of Southeast Asia's
regional bloc are among the more than 30 governments that have so
far sought to join the bank before a March 31 deadline.
That has prompted
handwringing among Asia-watchers in Washington. Many policy
experts have been urging for months that the U.S. has a better
shot at reforming the new bank from inside the tent than outside.
maintaining their distance from the bank, American and Japanese
responses seem problematic at best and churlish at worst,"
wrote Jonathan Pollack, a specialist on East Asia at the Brookings
"It is a
small-potato issue that is making the United States look weak at a
time when U.S. influence in the region is otherwise quite
strong," said Elizabeth Economy, director for Asia studies at
the Council on Foreign Relations.
China has been
reveling in Washington's unease.
European nations signed up, a commentary in the official Xinhua
news agency began triumphantly: "Welcome Germany! Welcome
France! Welcome Italy!"
Dongdong accused the U.S. of "sour grapes" and
hypocrisy, noting that President Barack Obama has urged a rising
China to shoulder more international obligations.
Mandarin-speaking former prime minister, Kevin Rudd, said Tuesday
the emergence of AIIB was part of China's geopolitical reaction to
"the door being slammed in its face" over increasing the
voting quotas of developing countries at the International
Monetary Fund and World Bank, currently skewed in favor of the
refused to support the proposed quota changes at the IMF — and
congressional approval of U.S. membership of an international
lender led by strategic rival China would also be a hard sell.
spokesman Jeff Rathke said Thursday the U.S. would welcome new
institutions that could help meet the pressing need for
infrastructure funding and incorporate high standards but it was
not considering joining any new institution "at the
The risk of
sticking to that path is that Obama's commitment to make Asia a
higher priority will appear too focused on security concerns.
Obama has pushed
a 12-nation pan-Pacific trade pact to beef up commercial ties, but
the pact still faces stiff opposition from Obama's own Democratic
Party, leaving doubt over whether it can be finalized this year.
Vikram Nehru, an
expert on Southeast Asia at the Carnegie Endowment for
International Peace, said Chinese officials have made positive
statements about the new bank cooperating with other lenders. He
said the AIIB would benefit from tapping into the experience of
the Asian Development Bank and World Bank, and supporting projects
that those lenders already have in the pipeline.