Asian Infrastructure Investment Bank (AIIB): regional solution or global threat?

(Global Capital, London, September 2015) The stated aim of the China-backed Asian Infrastructure Investment Bank (AIIB), officially launched in June 2015, is to respond to a need for massive spending across Asia. But its creation has caused political controversy, with supporters arguing it shows up previous iniquities while opponents fear it will be a mere tool for China's projection of power. An American campaign to boycott the AIIB collapsed in March when George Osborne, Britain’s chancellor of the Exchequer, announced that Washington’s staunchest ally would be joining the Chinese-initiated bank. Membership of the AIIB has since swelled to 57 countries, more than twice the number that half a century ago joined the Asian Development Bank (ADB), the incumbent Japanese- and American-led rival based in Manila. There will be significant support from Chinese policy banks for the One Belt, One Road strategy. State-owned banks experienced in financing overseas, such as ICBC or Bank of China, will be very well placed to provide support. There will probably be policy bank support from either Export-Import Bank of China or China Development Bank. And Sinosure will also have a role to play in terms of some of their export credit insurance. Canadian absence from the AIIB roster has largely escaped notice, although China is Canada’s second-largest trading partner after the US. Jack Austin, a former Canadian senator and influential politician who helped establish Canada’s diplomatic relations with China back in the 1970s, notes that Prime Minister Stephen Harper belongs to an evangelical Christian church that believes in the inerrancy of the Bible, and Christian fundamentalists are a core part of his support base. Austin says “The constituency sees China’s regime as totally hostile to their values”.