Interesting. I just picked the best bits from multiple Diplomat articles.
==========================
From the article, "Meanwhile, the United States has its own reasons to have stalled the reform and expansion of world financial institutions, particularly with regards to China’s involvement. For example, the United States may worry that China has different political values and it may not truly intend to abide by the international rules. As China shows great interest in becoming more engaged in the world financial system, the United States may even worry about the genuine political intentions behind Beijing’s newly found enthusiasm."
"The report found that China generally accepts international rules, and that its role has been changing — from opposing the international system to participating and suggesting reforms, and finally to supporting and defending the system."
"By excluding China, the world’s second largest economy, in Trans-Pacific Partnership negotiations, and by boycotting AIIB, the United States seems to have sent a strong message that it still has the capability to “isolate” China. However, it is the United States that has been more or less “isolated” this time around."
"Option two, which
I—along with virtually every other China analyst outside the U.S. government—supported back in October is that the United States join the AIIB. There are several reasons why this is a good idea. It would allow the United States a seat inside the tent where it could be both a positive force for best governance practices and an internal critic if things go awry. It also would likely help ensure that U.S. companies have fair access to the bidding opportunities that will arise from the AIIB’s investment financing. Joining now will be hard to accomplish in a face-saving manner, but the United States could begin by publicly recognizing the need for the financing capabilities in Asia that the AIIB can provide and by moving quickly to work with Australia, South Korea, and Japan to work out common principles of accession."
"Chinese-led resource and infrastructure investment has encountered significant difficulty in a number of countries, including Zambia, Myanmar, Vietnam, Brazil, and Sri Lanka, among others. If the AIIB does not do a better job than China’s own development banks, it will be a stain not only on Beijing but also on all the other countries that are participating."
"Nevertheless, the growing popularity of the AIIB could give China the opportunity to take a more proactive role in its intended plan to build new multilateral world institutions. In fact, the U.S. inadvertently helped facilitate such an opportunity, through its de facto containment attitude in its diplomacy toward China (especially regarding the regional territorial disputes), combined with a negative or even exclusionary policy in current multilateral economic frameworks like the International Monetary Fund and the Trans-Pacific Partnership."
"The irony is that the AIIB became a symbol of China-U.S. competition precisely because that is how Washington framed it. Aside from governance issues, the U.S. was worried the AIIB would undermine its own favored financial institutions, the World Bank and the Asian Development Bank. By encouraging allies to stay away from the initiative, the Obama administration turned a regional infrastructure back into a test case for its global influence – a case that the U.S. is now seen as losing. Gideon Rachman,
writing for Financial Times, called Washington’s handling of the AIIB issue a “diplomatic debacle” that “will make America look isolated and petulant.”"
"There are real concerns about the governance structure of the bank, including whether or not China will play an outsized role in determining who gets funding and who doesn’t. Such a set-up would only make it easier for China to wield its economic clout as a carrot (or a stick) to ‘encourage’ desired behaviors in other states. There are also legitimate worries about lax environmental and human rights safeguards for AIIB-funded projects."
"There are no good options left for Washington at this point. If it continues to refuse to join, it will look like a stubborn outlier that refuses on principle to take part in Chinese-led initiatives – even when the regional consensus is clearly that the AIIB is a positive development. If Washington joins on, its lateness will make it clear that the U.S. only changed its policy once it proved unable to sway friendly nations to join its boycott. As Elizabeth Economy pointed out in a
recent piece, the best move for the U.S. may be to simply sit this one out – quit pressuring its allies to stay away and, in Economy’s words, “let the AIIB rise or fall on its own merits.”"
