Over the weekend, China’s President Xi Jinping talked up the new Asian Infrastructure Investment Bank which it expects to rival such Western funders as the World Bank to develop Asian infrastructure. China had done plenty of this bilaterally, especially with countries that had natural resources China needs. But the AIIB is something different: an alternative finance system “for all,” Xi said, with China at its center.
He spoke at the “Boao Forum,” a four day gathering of government and business big-wigs, on tropical Hainan Island in China’s far south. Boao is a kind of Davos with palm trees and dumplings instead of snow and fondue. Xi laid out a plan to link China with its neighbors by financing transportation and infrastructure. He also dangled big trade opportunities with China over the coming years.
But of course, there’s more to it than that. China is intensifying its effort to add strategic heft to its economic progress of the last 35 years. Among the possibilities is setting up a parallel global financial system and having the yuan rival the dollar as a global reserve currency.
That all may be a ways off, but Washington seems concerned about the competition. The Obama Administration sent no high-level delegate to Boao, according to the Wall Street Journal.
In his talk, Xi also took a swing at US-led security arrangements in the Pacific. In the post-Cold War world, no one needs them, he said. Countries like Japan, Philippines and Vietnam worried about China’s claim to little islands of theirs in the western Pacific might differ. so, too, distant Ukraine. Still, forty countries are expected participate in the bank when it opens this year, including four US allies and members of the Group of Seven: Great Britain, Germany, France and Italy.
Another old Cantonese proverb may explain it: If you have money, you can make a ghost push a millstone.
In other words, Money Talks.
Here’s the WSJ article about the Boao event.
This is the Boao Forum website.
The Council on Foreign Relations explains it all.
While Foreign Policy dumps on US policy (you might have to register).