China-proposed Asian bank signals "ebb of U.S. influence" in Asia: U.S. paper

The recent decision by major U. S. allies in Europe to join the China-proposed Asian Infrastructure Investment Bank (AIIB) signals an "ebb of the U.S. influence" in Asia, a U.S. newspaper said Monday.

In an editorial, The Washington Post described as a "foreign policy setback" suffered by the Obama administration the decision by Germany, France and Italy last week to join Britain as shareholders of the AIIB, a new Chinese-sponsored multilateral development agency for Asia.

"The fact that four key European allies found it advantageous to join, despite U.S. insistence, speaks volumes about the ebb and flow of American influence in a region toward which President Obama had promised to 'pivot,'" said the editorial.

Following the Europeans' moves, South Korea and Australia will likely feel compelled to join the AIIB, leaving the United States and Japan on the outside looking in, it said.

When China first proposed the AIIB in 2013, the U.S. viewed it as a Chinese attempt to set up a rival to the U.S.-led World Bank, with the goal of expanding Beijing's influence across the region. Washington foresaw the negative consequence of a successful AIIB could be project funding ungoverned by the environmental and anti- corruption safeguards that World Bank borrowers must meet, the editorial noted.

It said Washington has itself to blame because "this turn of events might have been avoided if Congress had approved the Obama administration's request for International Monetary Fund (IMF) financing that included a formula for greater Chinese power at the IMF."

Obama's best bet is to redouble efforts to shore up World Bank funding, and to win congressional approval for the Trans-Pacific Partnership (TPP) free-trade arrangement, which would tie the U.S. and East Asia more closely together, as the appropriate way to parry the AIIB, the editorial contended.

The China-proposed AIIB, with an expected initial subscribed capital of 50 billion U.S. dollars, aims to become an international financial institution to fund infrastructure projects in Asia. It is expected to be formally established by the end of this year.

Twenty-one countries including China, India and Singapore signed a Memorandum of Understanding last October in Beijing on creating the bank. The bank has had 27 prospective founding members as Britain, France, Germany, Italy, Luxembourg and Switzerland recently applied to join the AIIB as founding members.

China's Finance Minister Lou Jiwei said Friday that the AIIB, instead of being a competitor, will be compatible with established international lenders.

The bank will complement other multilateral financial institutions including the Asian Development Bank and the World Bank, and bring mutual benefits to Asian countries and the world, he told Xinhua in an interview. Endite