China’s New Asian Development Bank: Embarrassing US

Published on Author dowdr17

This week, the deadline passed for applications to China’s new Asian development bank. The size and certain members of the application pool came as a big surprise to many. Those expressing interest include Taiwan and Norway, whose relations with China have not been strong recently. Taiwan is still considered a “breakaway territory” and was not expected to participate. Additionally, relations with Norway have been weak ever since it awarded the Nobel Peace Prize to a dissident Chinese writer.

Originally, the Chinese expected support to be limited to neighboring countries. Instead, 20 countries expressed interest, of which 14 have advanced economies. This strong support for their new Asian development Bank is a success in the eyes of the Chinese, especially amid the United States’ public opposition to the bank. Moreover, it stands as a reality for the United States, as institutions backed by the US have not met Asian demands for transportation infrastructure and pipelines.

Britain’s interest prompted a last minute boom of applications, further contributing to China’s dominance in the matter. Also, China now feels it can create a wide-based institution, without the US.

The Obama administration took a strong stance against China’s attempts to extend power in the region, and encouraged US allies to not participate. A main concern was that China would not consider important lending protections that would guard many people from being pushed off their land by development. Some believe that the United States could have avoided the embarrassment by allocating more voice to China in the World Bank and International Monetary Fund. Consequently, the US has weakened its strong stance against the bank, and claimed that it will encourage the former institutions to cooperate with the Chinese led new bank.

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