Glorious March of Asian Infrastructure Investment Bank Stumbles Upon Japan

© AFP 2023 / Takaki Yajima /POOLChinese Finance Minister Lou Jiwei (C) signs with guests at the signing ceremony of the Asian Infrastructure Investment Bank at the Great Hall of the People in Beijing
Chinese Finance Minister Lou Jiwei (C) signs with guests at the signing ceremony of the Asian Infrastructure Investment Bank at the Great Hall of the People in Beijing - Sputnik International
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The mainland China-led multilateral development bank project suddenly stumbled upon Japan, after Tokyo chose to distance itself from the Beijing financial initiative.

Chinese President Xi Jinping (C) takes photos with guests of the Asian Infrastructure Investment Bank at the Great Hall of the People in Beijing on October 24, 2014. - Sputnik International
Beijing May Not Allow Taiwan to Join AIIB to Avoid 'Two Chinas' Situation
Kristian Rouz — The Asian Infrastructure Investment Bank (AIIB), perceived by many as competition to the IMF, dominated by an unspoken trilateral pact between Washington, Brussels and Tokyo, has been expanding rapidly since its inception in October last year, with such global heavyweights as the UK, France and Germany, joining the Chinese financial initiative as founding members.

Nonetheless, the quick expansion of the new international institution, devised by Beijing largely as a response to the US-halted IMF reform, was suddenly slowed by an explicit and adamant reluctance of Tokyo to participate in international financial schemes beyond the already existing architecture.

“Our stance remains unchanged that we must cautiously watch how (Beijing) guarantees fair governance at the AIIB," a source in the Japanese government told Reuters. "We have not ruled out the possibility of either joining or staying out."

In a recent set of events, such major US allies as Taipei, Australia, the Netherlands and South Korea all expressed their desire to join the newly-created formally multilateral institution. However, as the main proclaimed target of the AIIB is financing infrastructure projects in the Asia region, there have been allegations the institution might serve as a tool to Beijing’s ‘checkbook diplomacy’.

Delegates attend a signing ceremony of the Asian Infrastructure Investment Bank at the Great Hall of the People in Beijing on October 24, 2014 - Sputnik International
Major European Powers Join Asian Infrastructure Investment Bank
Now, the Japanese government said it might opt to stay out of the AIIB also due to its lack of compliance with international governance standards, common in most existing supranational entities, as well as concerns of social safeguards.

Select European nations, including the UK, Germany and Russia, have supported the inception of AIIB, seeing the institution as an important step to enhance China’s global weight.

However, China has not yet outlined how the newly-created institution is going to be ruled. The decision-making process has not yet been disclosed.

Creation of the AIIB is possibly challenging the Japan-dominated Asian Development Bank (ADB), which has been reducing poverty in Asia since 1966. However, the initial amount of funds, readily available at AIIB’s disposal, will only be limited to $50 billion — less than one-third of the ADB’s capital.

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