The Obama administration’s negative response to China’s proposed Asian Infrastructure Investment Bank was a strategic mistake. Though some Chinese moves might be destabilising and require US resistance, this initiative should have been welcomed.
The US should be careful about opposing ventures that are popular and likely to proceed. Losing fights does not build confidence. Moreover, the new bank’s purpose — to develop infrastructure in Asia — is a good goal. The world economy needs more growth. Many emerging markets are eager to boost productivity and growth by lowering costs of transportation, improving energy availability, enhancing communications networks, and distributing clean water.
The AIIB offers an opportunity to strengthen the very international economic system that the US created and sustained. The AIIB’s designated leader, Jin Liqun, a former vice-president of the Asian Development Bank, sought advice in Washington. He engaged an American lawyer who was the World Bank’s leading specialist on governance. He also reached out to another American who had served as World Bank country director for China and then worked with the US embassy. If the AIIB was indeed threatening the American-led multilateral economic order, as its opponents seemed to believe, then its Chinese founders chose a curiously open and co-operative way of doing so.