Any news regarding international bodies, particularly banks, is rarely something that sets the pulses racing. However, the latest development regarding the UK’s backing for the chinese lead AIIB investment bank has caused a rather large ripple in the power play in international politics. It would, of course, be far too premature to call Chinas new Asian Bank a genuine rival to the heavily American funded world Bank. According to the BBC the $50bn in capital is only a fifth of what the world bank holds. Despite these limitations it is interesting to see the irritation the UK’s move has caused particularly in Washington, where a strongly worded statement from the white house read “This is the UK’s sovereign decision. We hope and expect that the UK will use its voice to push for adoption of high standards.” It seems that this new bank is increasing genuine concern from US officials as seen in this statement.
The exponential growth of the Chinese economy is very well documented, and it is for this reason that this new IFI lead by China acts as a direct threat to America’s global hegemony in international institutions. If history is anything to go by America does not like to share global power. This was the case throughout the Cold War albeit against a more obviously antagonising enemy. So does this new bank threaten the special relationship between the two most prominent english speaking countries in the world?
In my view I would be quite surprised if this was to radically change anything. Despite Washington’s apparent surprise at this I would find it hard to believe that this would damage such a strong relationship. I highly doubt we will ever see anything akin to the Bush-Blair years, but I just could not imagine anything that would break the relations despite this alliance with a regime (china) who have many questions to answer with regards to issues of human rights.
There is nothing wrong in taking a ‘different approach’, in the words of David Cameron, as long as the actions of this bank are transparent, then why should Britain not pursue its long-term interests in emerging markets. From a small business perspective this could open up many avenues which until now might not have been available. It may also allow for easier trade to flow and for greater networking opportunities between Asian and British companies. France and Germany are becoming members as well, so clearly they are also seeing the potential benefits of joining the AIIB.
It is difficult to understand why the United States would have an issue with the UK pursuing its own interest for reasons other than feeling threatened by the emergence of another hegemon (China). There has been a lack of any semblance of International stability under the Obama administration with Russia flexing its muscles across the Ukraine and around the baltic region, as well as the instability that has engulfed the Middle East. Perhaps this has made people in Washington worry about any further threats which may explain perceived hostility towards the Chinese driven IFI.