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US about-face on AIIB would be welcomed

By Chen Weihua | China Daily | Updated: 2015-03-27 07:36
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China's President Xi Jinping (4th R) meets with the guests at the Asian Infrastructure Investment Bank (AIIB) launch ceremony at the Great Hall of the People in Beijing in this October 24, 2014 file photograph. [Photo/Agencies]

The past week has seen a major shift in US attitudes towards the Asian Infrastructure Investment Bank as Treasury Under Secretary for International Affairs Nathan Sheets told the Wall Street Journal that the United States welcomes new multilateral institutions that strengthen the international financial architecture. He also hoped that the AIIB would co-finance projects with the World Bank and Asian Development Bank.

This was welcome progress given the rhetoric from several US officials just a week ago. In his testimony before the US Congress last week, Treasury Secretary Jack Lew continued to express deep doubt about AIIB's standards on governance, transparency, corruption, labor and environment.

For months, US officials have been pressuring the country's allies to stay away from AIIB, but the decision by its key European allies to apply to join as founding members has sent a clear message that they are no longer Washington's poodles. South Korea, a country that has been heavily pressured by the US, just announced its hard decision on Thursday to join AIIB. Australia, which is feeling the brunt of US pressure, is very likely to apply before the March 31 deadline.

US leaders have for years said Asia-Pacific nations do not have to choose between China and the US, yet its pressure on its allies to resist the AIIB has served to show this is not the case.

If Washington wants to add substance to those words, it needs to stop pressurizing Australia, South Korea and Japan not to join the AIIB. These three countries are important members of the Asia-Pacific community and should not be left out of a multilateral institution like the AIIB. The AIIB, which aspires to pool resources to fund much needed infrastructure projects in the region, will be a win-win institution for all nations.

The World Bank and Asian Development Bank can only meet a fraction of the huge need for funds for infrastructure in the region, so there is ample room for the AIIB. That is why World Bank President Jim Yong Kim, IMF Managing Director Christine Lagarde and ADB President Takehiko Nakao have not only extended welcoming arms, they are also seeking to partner their organizations with the AIIB.

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