The Multidimensional Values of the Asian Infrastructure Investment Bank

By+LIN+MINWANG

INTERNATIONAL relations often mimic interper- sonal relationships， insofar as should one party want to break away from past habits or conventions， he or she is likely to meet arguments and obstructions. The Asian Infrastructure Investment Bank （AIIB）， proposed by China， recently entered a squall in the form of a new round of contentions. Certain observers perceive “boycotts” and “doubts.” The United States and Japan are， to a certain extent， their source. Both have declined to join the bank as founding members. They furthermore insist that the AIIB establish environmental and social standards or protective measures that accord with those of the Asian Development Bank and the World Bank. Other observers within China， in contrast， are over-enthusiastic， and overestimate the banks geostrategic value. In my opinion， history will show that the AIIB is neither as ill-advised as pessimists imagine， nor as invincible as optimists believe. A calm， objective stance is a prerequisite to valid observations.

The Significance of the AIIB to China

The AIIB undoubtedly carries significance for China. But is it， as a fair number of observers hold， an “epochmaking” initiative that heralds Chinas creation of a new world？ Such lofty aspirations are difficult to realize. At present， the bank is still at a preparatory stage. Given that China has no background in setting up an international regime， it consequently lacks the necessary knowledge to do so. Therefore， the AIIB can only proceed through observing the workings of other international financial organizations and institutions. Features of its establishment， such as leadership structure and the responsibilities of its president， must follow international conventions. Furthermore， dominance can hardly be Chinas goal in view of its disinclination to pursue “veto power” in decision-making. The significance of the AIIB to China is mainly embodied in the following three respects.

First， China has begun bold attempts to provide regional public goods. In an interview with New York Times columnist Thomas Friedman last August， U.S. president Barack Obama accused the Chinese of being“free riders” in the global system， saying “... they have been free riders for the last 30 years and its worked really well for them.” As Chinas contribution to the global economy and world peace must be obvious to all， this comment does not merit the time and trouble it takes to refute it. Since the new Chinese leadership took office， the country has displayed stronger intentions to provide regional public goods. President Xi Jinping has said more than once during visits to neighboring countries，“Welcome aboard the free ride of Chinas development. Whether by express train or for free， you are welcome.”This reflects the understanding on the part of Chinas new leadership of the countrys share in the world economy； also Chinas desire for a more active role in developing regional economy.endprint

Asias vital， dynamic development has been integral to driving the global economy. Infrastructure and fund shortages， however， obstruct Asias sustainable development. Asian countries can obtain only a fraction of the funds they need from the World Bank， the International Monetary Fund， and the Asian Development Bank. They therefore hope for a new platform to gain the wherewithal necessary for infrastructure construction. This is the backdrop to the Chinese governments advocacy of the AIIB. Establishment of the bank can provide the massive funds needed for infrastructure construction in Asia and hence for the regions economic and social development. Certain countries that urgently need finance and are keen to expand their market have applied to join the AIIB. They can see that the development opportunities the AIIB offers will rapidly hoist them out of the mire of the financial crisis

Second， China pursues a pattern of common interests and collaboration throughout the international community. The AIIB， in addition to promoting regional economic development， can satisfy various needs in the international community. It has indeed become a global public good. The U.K.， France and Germany have consid- erable influence in the international financial architecture， and as founding members will have an even greater say. Certain countries with developed financial industries， such as Switzerland， Luxembourg， Saudi Arabia， Qatar， Kuwait， Jordan， and Oman， can， with help from the AIIB， relocate their financial assets worldwide. Meanwhile Australia， Brazil and other resource-rich countries have seen that infrastructure construction will boost the needs for upstream resources， such as iron ore and other minerals， and energy. It thus seems clear that the establishment of the AIIB could not have come at a better time， and that it satisfies the comprehensive demands of the international community.

Third， China is practicing a new concept of external behavior. Since the new leadership took office， China， as greatest beneficiary of the era of peaceful development， has been advocating international values that feature inclusiveness， opening， solidarity， cooperation， and development. China actively resolves zero-sum games and confrontation among countries， and promotes a “new model of major country relations.” It advocates “partnership but non-alignment” and the “diplomatic justice-interest view” among developing countries and in its neighboring countries. Chinas aim is to form a “community of common destiny”in efforts to build new-type international relations.endprint

China advocates the establishment of the AIIB within the field of international economic cooperation in the belief that “a wide heart embraces all.” Its focus is on integrating with existing mechanisms and striving to build a brand-new， complementary and multivariant financial pattern. Developed countriesmembership of the AIIB enables an organic mingling of South-South and South-North cooperation. China， as a major developing country， can be a bridge between developing and developed ones. The AIIB design embodies not hegemony but the core values of Chinese-style equality and mutual benefit. It sets out to operate according to the objective law of economics， to comply with the trend of the era and of regional development， and to satisfy the needs of infrastructure investment in Asia. That various countries have joined signifies their acknowledgement of and support for these core values. It is upon this basis that specific regulations and the division of regional proportions will be designed.

The World Significance of the AIIB

The practical value of the AIIB is not yet apparent to the world as a whole. In the course of its gradual establishment and operation， however， its spiritual value may exert global influence. Its significance is manifest in the following three aspects.

First， it brings home to big countries that “a just cause enjoys abundant support， while an unjust cause finds scant support.” Various countries of the world should regard the relationship between a rising country and a world leading country from a higher perspective. Geostrategic struggle is not what relations between big countries are all about. They live in the same global society， and bear responsibility to uphold world peace and development. Thinking of world politics as purely confrontation and conflict， therefore， is inappropriate.

The establishment of the AIIB will make big countries consider how the world might enter a new era of cooperation. Attempts to obstruct Chinas key role in promoting Asian economic development， thus impeding other countries from giving due play to their international influence， are bound to fail. China has no obvious desire to conquer the world， and does not oppose a democratic world. Its diplomacy is driven by the interests of domestic economic development， and not the “rescue mission” of a transcendent ideology. Cold War thinking is obsolete， and no big country can afford its high price.

Second， the bank provides an external stimulus for reforms to the existing international regime. For years， many countries have been unaware that developing countries have totally different opinions on the growth of Western-dominated global institutions. The IMF and World Bank have never reflected on the appropriateness of their policy prescriptions for developing countries. Nor have they considered taking into consideration the practical needs of the developing world， instead adopting a decidedly harsh and dogmatic approach. Although the AIIB， World Bank and the Asian Development Bank will be complementary and mutually beneficial， the AIIBs operation mode may draw on Chinas practice of diplomatic and economic development. The world indeed needs Chinas development and investment experience. This will constitute the success of the AIIB， and also the dynamic through which to stimulate the reform of other global institutions.endprint

The third aspect is that of exploring the cooperation mode of new-type multilateral mechanisms. Infrastructure facilities in Asia will be extremely costly， and can by no means be resolved by just one country or bank. The AIIB and the Silk Road Fund that China has set up will be complementary and push forward infrastructure construction in the Asia-Pacific. Meanwhile， it will not only correlate with financial organizations led by China， but also with other international and regional financial institutions， such as the World Bank and the Asian Development Bank. The AIIB does not want to “go its own way，” but rather follow international conventions and learn about such matters as financial credit ratings from the World Bank and Asian Development Bank. It therefore heralds coordination and cooperation between international mechanisms. The success of this mode will lay foundations for more multilateral mechanisms in the future.

In short， the establishment of the AIIB has positive significance for both China and the world. However， it is neither as prominent as certain geostrategists claim nor as passive as certain pessimists warn. It is better for countries around the world to be active and hands-on rather than just looking on dispassionately. Promoting the AIIB with the aim of making greater contributions to regional and global development is the right attitude.endprint