Even countries like the United States, which opossed China’s initiative from the the beginning, now want to participate.
China took another step Tuesday to realize its dream of leading an Asian Infrastructure Investment Bank, the first multilateral financial institution that will not be dominated by the United States or its allies.
Today was the deadline given by China for interested partes to apply and more than 45 nations have done so despite the explicit rejection of the US.
Among the last economies to submit their candidacy were Sweden, Spain and Taiwan, which has no formal ties with mainland China and Norway, despite its bad relations with Beijing after the Nobel prize to Liu Xiaobo.
China plans to announce who will be the founding members of the institution next April 15. It will do so in Beijing where Jin Liqun and China are expected to say the bank will become operational by year end.
Although we know that the bank will have an initial capital of at least $50 billion, and $100 billion in committed reserves, there are still many details to be specified.
It is unclear whether China will have veto power and the Government does not want to clarify such a thing. Its deputy finance minister Shi Yaobin claimed last week that “it is not true that China has sought or has waived a right of veto”.
A lack of clarification of this type has prompted the US to issue reservations about the future of the bank, because it fears the Asian bank may weaken existing organizations such as the World Bank or the Asian Development Bank (ADB).
Washington questioned China’s initiative because of what appears to be a lack of sufficiently rigorous standards of governance or lending. The countries that have applied reply that it will be easier to negotiate rules which ensure transparent management and strict standards once they are accepted.
In the background lies a power struggle between the two largest economies in the world because the US refuses to participate in a development bank promoted by China while it joins the promotion of the Accord of Association of the Pacific that the US is expected to sign with another 11 countries but not with China.
The US Treasury Secretary, Jack Lew, visited Beijing on Tuesday, where he met, among others, with Premier Li Keqiang. Lew expressed the willingness of his country to “cooperate with China as the country deepens its financial reforms, becomes more integrated and takes on greater responsibility in the global financial system.”
China says it will use the example of existing institutions to emulate their good practices and avoid their shortcomings, such as excessive bureaucracy when granting credit.
This weekend, Chinese President Xi Jinping stressed that the new bank will complement the work of the World Bank.
“Being a big country means assuming greater responsibility in the region, while not seeking a greater monopoly on regional and global issues,” argued the president.