AIIB 'backfired' on US: Expert
They may have dithered on the current level of trustbetween the two powers, but both US and China experts agreed that Washington's resistance to the China-led Asian Infrastructure Investment Bank was a blunder thatbackfired on US efforts to restoreinfluence in the region.
As European allies scrambled to be charter members, the US saw itself isolated whenvocally discouraging them to do so, scholars said on Wednesday at the World Forum on China Studies, which was jointly hosted by the Carter Centerand the Shanghai Academy of Social Sciences at the Jimmy Carter Presidential Center in Atlanta.
The US raised concerns about transparency of the bank's governance structure, though some felt thatthis showed thinly veiled anxiety over China's rising influence in Asia, especially as theUS negotiates the Trans-Pacific Partnership. PresidentBarack Obamain recent days said the sweeping trade pact with Japan andother Pacific nations could serve to keep China from "writing the rules" on regional trade inthe 21st century.
Lin Yifu, former chief economist and vice-president at the World Bank, said these sentimentsmissed the point that the infrastructure bank is a "good deal" for a region with up to $8 trillion in infrastructure bottlenecks.
"The current sources, from the World Bankand from the Asian Development Bank, can only provide a pretty small, tinyportion for this kind of requirement.If we are really concernedwith development in Asia, we should certainly welcome ... a new institution," Lin said.
For the US,a way tochange the system would have been toreform it from within."If you want to improve the management, the best way is to join the board," Lin said.
The infrastructure bank is just one in a series of deft moves byChina - along with the BRICS bank and the "One Belt, One Road" initiative - to work within thecurrent US-led "world order" even while challenging it, saidDavid Bachman, Henry M. Jackson professor of International Studies at the University of Washington.
"One could easily arguethat with these institutional proposals and developments, China is acting as a sustainable stakeholder of the system while showing up some of the weaknesses of both the order and the United States," Bachman said.
US efforts to pass the TPP and force China to "take it or leave it" in order to participate reflect increasing worriesonthe US side that a global economic system that has provided it with specialprivileges could eventually unravel. Instead, theUS should recognize that a "bipolar" world has emerged,Bachman said.
David Lampton, director of China studies and professor at the School ofAdvanced International Studies at Johns Hopkins University, agreed thatChina and the USmust understand the implications of this power shift for how they relate to each otherand to the world.
He called for the US to welcome enhanced Chinese participation inmultilateral bodies like the International Monetary Fund, recommending that the two sides build bilateral institutions that"systematically reinforce" their interdependence and prioritize balance and stability in the global system, resisting thetemptation to resort tonationalism.
"Fundamentally, America has to rethink its objective of primacy, and China must recalibrate its own sense of strength and what that strengthentitles it to," Lampton said.
He encouraged joint infrastructure investment as a way to reinforce interdependence and build constructive cooperation in other countries.
"The United States and China shouldcooperate in the development of infrastructure projectsaround the world. The initial US reaction to the AIIB was the wrong reaction," he said. "Washington, Beijing and perhaps NGOs in both countries could cooperate on projects in Afghanistan, for instance."
He also called for speedy negotiations on a bilateral investment treatyunder consideration and for both sides to welcome mutual investment in job-creating industries.
