Support for China-led development bank grows despite US opposition

[Keel]

Pretending to have a spat with US lessens the Chinese suspicion .. old trick but can be effective

absolutely
If they want to play rough on the institution they have a host of tricks irrespective of their shareholdings

Painting from print art

 

[TaiShang]

Abbott switch on China bank defies US

THE federal government is close to reversing its opposition on strategic grounds to Australia joining the $50 billion China-led infrastructure bank, with Tony Abbott having reassessed his earlier worries.

The Prime Minister is now seized by the regional potential of the bank, more confident that China will pledge to a genuine multilateral institution and aware that Australia must be a proactive participant in Asian infrastructure decisions.

Mr Abbott has become distinctly less impressed with warnings from the administration of US President Barack Obama about the potential dangers of excessive accommodation of China.

The government will make a decision in the near future.

Every sign is that Joe Hockey, a sustained advocate of Australia’s participation in the China-led Asia Infrastructure Investment Bank, will have the victory that was denied to him late last year.

At that time, the Treasurer was outgunned at a cabinet National Security Committee meeting that saw Foreign Minister Julie Bishop carry the day with strategic arguments about China and against our involvement that reinforced US concerns.

The change of sentiment follows an internal reassessment within the government and intense talks and movement within the G7 group of finance ministers and central bank governors.

But it is also related to the Obama administration’s ineptitude and mismanagement of Mr Abbott as a dedicated US alliance supporter.

In recent days, an open spat has erupted between the British government and the Obama administration about Britain’s decision to seek to become a foundation member of the new proposed bank, with its potential to shift the balance of financial power in Asia.

Mr Abbott has signalled that he will not allow Australia to be isolated on this issue.

In his exclusive weekend interview with The Australian on Sky News, he said: “I note that the UK has indicated an intention to sign up for the negotiations, the New Zealanders before Christmas signed up for the negotiations, the Singaporeans likewise, the Indians likewise.

“We’re looking very carefully at this and we’ll make a decision in the next week or so.

“I would like to think that it is possible for this to be a genuinely multilateral institution and I think it could well be an important part of bringing China fully into the international community.”

The reality is that any Australian move is late in the day. Nearly 30 nations have signalled their participation in the negotiations. More G7 nations are likely to sign up, confirming the strong shareholder base of the new institution. Australia and South Korea have been consulting and may move in proximity with each other.

An important element overlooked in this debate is that when the issue was discussed in the full cabinet last year Mr Abbott was sympathetic to China’s position, only to shift his position on strategic grounds during the later NSC decision-making. It now appears the Prime Minister is lining up with the Treasurer.

The US has mishandled the issue. It has become a symbolic test of changing power relations in Asia. The inability of the US political system to authorise reform of the International Monetary Fund is basic to growing support for the China-led bank.

During the NSC meeting last year, Ms Bishop presented scenarios of how China could convert financial power via investment loans to the region into direct military influence in vulnerable nations close to Australia. But the impression now is that economic factors are likely to outweigh strategic concerns.

The issue is a test of relations between Mr Hockey and Ms Bishop and, given his public comments, of Mr Abbott’s authority.

The Prime Minister said in the interview: “If China is prepared to set up such an institution well I frankly hope that many countries including the United States and Japan would join it.”

The US has criticised the Cameron government in Britain for its decision, saying there is a “trend towards constant accommodation of China”.

Much of the debate, however, hinges around the tactics to extract from China concessions to ensure the institution is multilateral, not an arm of China strategic intervention.

The immediate decision involves signing up for a negotiation. But any further delay on Australia’s part will have damaging consequences.

While the Obama administration has put pressure on Australia, Mr Abbott has told colleagues that both the US President and Secretary of State John Kerry had no problem with Australia joining a genuine multilateral institution.

However, a senior government figure said: “If Tony Abbott is getting impatient with US arguments about China, then the Americans have a problem.”

Interviewed on Sky’s Australian Agenda program yesterday, Labor deputy leader and shadow foreign minister Tanya Plibersek said Labor believed Australia should sign up to the new bank.

Ms Plibersek said the existing financial architecture “hasn’t made room for China” and that new investment would be vital for the region’s infrastructure needs.

***

About the part highlighted in red that definitely reinforces the wonderful observation by @55100864 that these Western countries might also be planning to serve as a Trojan horse in order to weaken the institution and derail China's institutional advancement.

In most cases, "bringing China into international community" means making another pet for Western hegemony. Otherwise, how could China, the largest trading partner in the world possibly be outside the "international community" while Australia, much smaller in size in terms of international trade when compared to China, a full international community member?

I would rather have seen Japan and Korea join the organization than UK and possibly Australia.

 

[ahojunk]

The reality is that any Australian move is late in the day. Nearly 30 nations have signalled their participation in the negotiations. More G7 nations are likely to sign up, confirming the strong shareholder base of the new institution. Australia and South Korea have been consulting and may move in proximity with each other.

I predict that both Australia and South Korea will join. There is just too much money to ignore. We are talking of $800 billion dollars of infrastructure development in in Asia over the next 5 years.

“I would like to think that it is possible for this to be a genuinely multilateral institution and I think it could well be an important part of bringing China fully into the international community.”

When you don't want to join you can spin it negatively such as you are worried about the transparency and governance structure and other bs. When you are going to join, you can then spin it positively, ie. how Australia can play a positive role. This is political spin at its best.

But the impression now is that economic factors are likely to outweigh strategic concerns.

Money talks, and very loudly too. lol.

About the part highlighted in red that definitely reinforces the wonderful observation by @55100864 that these Western countries might also be planning to serve as a Trojan horse in order to weaken the institution and derail China's institutional advancement.

In most cases, "bringing China into international community" means making another pet for Western hegemony. Otherwise, how could China, the largest trading partner in the world possibly be outside the "international community" while Australia, a midget when compared to China, a full international community member.

I would rather have seen Japan and Korea join the organization than UK and possibly Australia.

There could be some truth in this Trojan horse thing, can't deny it.

Come on, when you say Australia is a midget, I am not so happy as I am an Aussie. But what the heck, the truth hurts sometimes.
.

 

[AndrewJin]

It looks like Australia is the next to jump. It's all a political charade.
There is a lot of money on the table and possibly more to come.
They are talking about $800 billion worth of infrastructure projects in Asia over the next five years.
It's kind of stupid to say "NO".

---------------------------------------------------------------------------------------
Abbott says Australia will decide soon on whether to join AIIB | South China Morning Post

Abbott says Australia will decide soon on whether to join AIIB
Decision to be part of the China-backed institution would likely upset US and Japan
Sunday, 15 March, 2015, 7:00am

View attachment 202872
Australian Prime Minister Tony Abbott says a decision will be make within weeks on whether the country will seek to join the China-backed Asian Infrastructure Investment Bank.

Australia expects to make a decision within weeks on whether it will seek to join the China-backed Asian Infrastructure Investment Bank (AIIB), Prime Minister Tony Abbott said yesterday.

Australia's decision on whether to become a founding member of the institution risks upsetting either key strategic allies the United States and Japan, or top trading partner China.

Britain this week said it had sought to become a founding member of the AIIB because it was in its "national interest", making it the first Western nation to embrace the institution which would finance infrastructure projects in the Asia-Pacific.

"Our position all along has been that we are happy to be part of some thing which is a genuine multilateral institution such as the World Bank, such as the Asia Development Bank. What we are not prepared to do is to sign onto something which is just an arm of one country's foreign policy," Abbott told Sky News Australia.

"We're looking very carefully at this, and we'll make a decision in the next week or so."

Twenty-one countries were represented at the announcement of the bank in October - Bangladesh, Brunei, Cambodia, China, India, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, the Philippines, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan and Vietnam. Indonesia later said it would join.

But Japan, Australia and South Korea have held back ahead of a March 31 deadline.

.

I love Tim Tam! Why not open a branch in China?
Of course Australia is huge. I took 7-hour Prospector from Perth to Kalgoorlie，endless bush and wilderness.

 

[ahojunk]

Sorry to go off topic here!

@AndrewJin
Of course, we love our Tim Tam, and also our vegemite.
Also, we have our kangaroos, koalas and wombats.

Yes, Australia is a big country but most of it is desert or semi-arid - our famous outback.

Now, back on topic.

Australia and South Korea would most likely join, after putting up a political charade.
But I have not heard any news from Japan about them joining AIIB. Japan is under the thumb of US, I don't think Japan is game enough to join. But I hope I am wrong.

 

[Götterdämmerung]

Germany, France and Italy are joining the club as well!

 

[Kiss_of_the_Dragon]

For those who can understand Chinese, there is an interesing dicussion and analysis of why is in England's interest to join development bank (second part @ 38:25 min)

 

[cirr]

Germany, France and Italy are joining the club as well!

One should never ever turn down a good business proposal。

One should never ever turn down the opportunity of joining a private club。

European giants side with UK in Chinese World Bank row with US

France, Germany and Italy sign up to China's $50bn Asian Infrastructure Investment Bank

The US has voiced concerns after Britain signed up to the China-backed Asian Infrastructure Investment Bank Photo: EPA

By Agencies

11:46PM GMT 16 Mar 2015

France, Germany and Italy have joined Britain in signing up to the China-backed Asian Infrastructure Investment Bank (AIIB), dealing a further blow to the US government.

Australia is also believed to be rethinking its position to stay allied with the US and reject joining the $50bn bank, which is seen as a rival to the World Bank.

Last week the UK said it believed its decision to become a founding member of the AIIB was in the national interest, shrugging off US concerns about the move.

"There will be times when we take a different approach (to the United States)," a spokesman for Prime Minister David Cameron told reporters, referring to the decision to join the bank. "We think that it's in the UK's national interest."

The AIIB has been feted by Beijing as a way of financing regional development.

Britain's move drew a cautious response from Washington, but Mr Cameron's spokesman said the Prime Minister did not think the episode would damage London's ties with the US, and that Chancellor George Osborne had discussed the matter with his American counterpart beforehand.

The AIIB would play "a complementary role" to other funding institutions, he said, and would help fill a genuine niche to provide additional investment to lower income countries in the Asia-Pacific region.

Britain would help ensure it upheld high standards of governance, he added, denying that the Government's decision to join the bank was part of a pattern of cosying up to Beijing too much.

Mr Osborne said on Thursday that Britain would join discussions with other founding members of the AIIB to set out the institution’s governance and accountability structures later this month, in a move to bolster relations with China.

“Forging links between the UK and Asian economies to give our companies the best opportunity to work and invest in the world’s fastest growing markets is a key part of our long-term economic plan,” Mr Osborne said last week.

“Joining the AIIB at the founding stage will create an unrivalled opportunity for the UK and Asia to invest and grow together.”

However, US National Security Council spokesman Patrick Ventrell voiced concerns over the decision.

“We believe any new multilateral institution should incorporate the high standards of the World Bank and the regional development banks,” he said.

“Based on many discussions, we have concerns about whether the AIIB will meet these high standards, particularly related to governance, and environmental and social safeguards.”

China and 20 other countries signed a memorandum of understanding to establish the Beijing-headquartered bank in October.

The bank has support from countries including India, Singapore, Malaysia, Cambodia, Pakistan, the Philippines, Uzbekistan and Vietnam.

European giants side with UK in Chinese World Bank row with US - Telegraph


--------------------------------------------------------------------------------------------------------------------------------------
Lots lots of infrastructure investment opportunities for our European partners within China itself。

The government of China wants to increase the number of commercial airports from around 250 to 2800. This means at least one airport for each county of the country.

China Wants To Have 2800 Airports — Civil Aviation Forum | Airliners.net

 

[TaiShang]

I predict that both Australia and South Korea will join. There is just too much money to ignore. We are talking of $800 billion dollars of infrastructure development in in Asia over the next 5 years.

When you don't want to join you can spin it negatively such as you are worried about the transparency and governance structure and other bs. When you are going to join, you can then spin it positively, ie. how Australia can play a positive role. This is political spin at its best.

Money talks, and very loudly too. lol.

There could be some truth in this Trojan horse thing, can't deny it.

Come on, when you say Australia is a midget, I am not so happy as I am an Aussie. But what the heck, the truth hurts sometimes.
.

By midget, I meant, in terms of global presence as the leading trading partner. But, nonetheless, the characterization was over the board, so, forgive the language. I have edited the text.

About the Trojan horse, I guess, the more diversity the AIIB achieves, the less chance one party/bloc to dilute/derail it. With too many stakeholders, there will be too many interests to align. And in no way the West, formidable as it is, is a monolithic organism. More Western participation, as a number of threads across this board suggest, is a good thing in terms of institutional health and durability.

AIIB seems to have interestingly turned into a test case of the strength of the sovereignty of non-US Western countries.

As for Australia in particular, China can happily do business so long as its internal affairs is respected. Geopolitically, I think China perceives Australia as one of the regional states under the US sphere of influence. Hence, it is viewed in the context of the Pivot.

 

[ganesh177]

So far how many countries have joined ? Any list ?

 

[rott]

As more European countries join in, we can easily shrug off the Trojan horse. I do not think it's in the best interest of UK to drown their European counter parts.

 

[LittleFish]

One should never ever turn down a good business proposal。

One should never ever turn down the opportunity of joining a private club。

European giants side with UK in Chinese World Bank row with US

France, Germany and Italy sign up to China's $50bn Asian Infrastructure Investment Bank

The US has voiced concerns after Britain signed up to the China-backed Asian Infrastructure Investment Bank Photo: EPA

By Agencies

11:46PM GMT 16 Mar 2015

France, Germany and Italy have joined Britain in signing up to the China-backed Asian Infrastructure Investment Bank (AIIB), dealing a further blow to the US government.

Australia is also believed to be rethinking its position to stay allied with the US and reject joining the $50bn bank, which is seen as a rival to the World Bank.

Last week the UK said it believed its decision to become a founding member of the AIIB was in the national interest, shrugging off US concerns about the move.

"There will be times when we take a different approach (to the United States)," a spokesman for Prime Minister David Cameron told reporters, referring to the decision to join the bank. "We think that it's in the UK's national interest."

The AIIB has been feted by Beijing as a way of financing regional development.

Britain's move drew a cautious response from Washington, but Mr Cameron's spokesman said the Prime Minister did not think the episode would damage London's ties with the US, and that Chancellor George Osborne had discussed the matter with his American counterpart beforehand.

The AIIB would play "a complementary role" to other funding institutions, he said, and would help fill a genuine niche to provide additional investment to lower income countries in the Asia-Pacific region.

Britain would help ensure it upheld high standards of governance, he added, denying that the Government's decision to join the bank was part of a pattern of cosying up to Beijing too much.

Mr Osborne said on Thursday that Britain would join discussions with other founding members of the AIIB to set out the institution’s governance and accountability structures later this month, in a move to bolster relations with China.

“Forging links between the UK and Asian economies to give our companies the best opportunity to work and invest in the world’s fastest growing markets is a key part of our long-term economic plan,” Mr Osborne said last week.

“Joining the AIIB at the founding stage will create an unrivalled opportunity for the UK and Asia to invest and grow together.”

However, US National Security Council spokesman Patrick Ventrell voiced concerns over the decision.

“We believe any new multilateral institution should incorporate the high standards of the World Bank and the regional development banks,” he said.

“Based on many discussions, we have concerns about whether the AIIB will meet these high standards, particularly related to governance, and environmental and social safeguards.”

China and 20 other countries signed a memorandum of understanding to establish the Beijing-headquartered bank in October.

The bank has support from countries including India, Singapore, Malaysia, Cambodia, Pakistan, the Philippines, Uzbekistan and Vietnam.

European giants side with UK in Chinese World Bank row with US - Telegraph


--------------------------------------------------------------------------------------------------------------------------------------
Lots lots of infrastructure investment opportunities for our European partners within China itself。

The government of China wants to increase the number of commercial airports from around 250 to 2800. This means at least one airport for each county of the country.

China Wants To Have 2800 Airports — Civil Aviation Forum | Airliners.net

Wooooooooooooooooooooooooow......All EU gaints joined...Let's see how long can Japan&Australia pretend to sleep

 

[AndrewJin]

I think Australia will join at last, but Japan will not.

 

[Edison Chen]

China begins to take her role as a responsible global power, we are not selfish as those media described.

 

[LittleFish]

I think Australia will join at last, but Japan will not.

And we don't want Japan and US...A Britain is troublesome enough.