By Zha Daojiong, professor of international political economy, Peking University
The China-led Asian Infrastructure Investment Bank has become a hot topic among international observers. That focus will only intensify in the next few days as the Boao Forum for Asia gets under way.
To address outside – especially US – skepticism, CCTV.com’s opinion column Panview invited Zha Daojiong, a professor of International Political Economy at Peking University, to comment on the perception gaps. For China, AIIB is an endeavor to create an inclusive, professional and transparent funding mechanism for infrastructure development, especially in the Asia-Pacific region. But the US sees it differently, although it also acknowledges the needs for increased infrastructure investment.
That the United States chooses not to join the Asian Infrastructure Investment Bank (AIIB) as a founding member is in and of itself not a surprise. But the level of public fury emanating out of Washington in recent weeks is a puzzle.
First of all, China conducted a negotiating process for establishing the bank. Among many measures, Natalie Lichtenstein, a Harvard-educated lawyer who worked for the World Bank for over 30 years, was among the experts invited to help prepare the bank’s charter. That gesture alone is an indication that China seeks to build on the experiences and lessons of existing multilateral development banks in founding AIIB. As the largest underwriter, China has the biggest stake in seeing the proposed bank have a well-conceived institutional structure.
Second, AIIB is but one of a number of initiatives China has put forward within the same timeframe to interact with the rest of the world economy. The pilot Shanghai Free Trade Zone, its enlargement and recent expansions to Fujian, Guangdong and Tianjin, for example, indicate that China is serious in further liberalizing its own investment and trade policies. This liberalization is unilateral and demonstrates China’s commitment to reforming its own policies rather than simply asking others to follow it past practices.
Third, it was only a couple of months ago that the US and China agreed on a 10-year multiple visa arrangement for their respective passport-holders. This is transformational. Many Western countries followed suit, though to varying degrees. With more convenient international travel, an ever-growing multitude of cross-border traders and investors stand to benefit. When it comes to internationalizing Chinese foreign investment project operations, it is the project managers on the ground, not authors of their code of conduct, who do the real job of putting promises of responsible investment into action. AIIB is a multilateral effort and conducive to having more Chinese investors internationalize themselves. The US ought to see that development as desirable, too.
Concerns expressed by the US and some of its allies that AIIB is not an exact copy in its governance structure of the World Bank or the Asian Development Bank are somewhat understandable. Still, it would be hardly convincing if Washington were in effect arguing that a new international development institution cannot be innovative.
For China and other founding members of AIIB, the last thing they want is validation of fears aired by critics and skeptics, not just in the outside world but domestically in China as well.
The real challenge for AIIB is not so much who’s in, who’s out. Rather, it is whether or not the new bank can satisfy its customers and shareholders. To view ongoing developments associated with AIIB as a manifestation of soft power competition between Beijing and Washington is overbearing. After all, no country has money to burn.
China would be ill-advised to regard Washington’s disapproval of its allies joining AIIB as an affront. As a traditional Chinese saying goes: Listen to both sides and you will be enlightened; heed only one side and you will be benighted (兼听则明，偏信则暗).
If the US is concerned about AIIB having an impact on its soft power, it could serve its own interests better by keeping an open mind about the project. It should also look at possibilities of collaboration on specific investment projects in the future.
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