Buyer's Remorse? Or A Bold New Direction?

[Genesis]

A bank made in China and better than the western model

Read this article if you like, I agree with a lot of what it's saying, but one point. China's role and expectations of the AIIB and why there isn't or shouldn't be any buyer's remorse, instead China is charting a new course and working within an international structure, though, in our favor, rather than the US, but not overly so.

Groucho Marx said he would refuse to join any club that would have him as a member. He did not however try to discourage his friends from signing up. That is what the US did when it came to the Asian Infrastructure Investment Bank, a China-led institution that Washington regarded with some suspicion.

One Beijing-based US executive scoffed at the very notion that China could run a multilateral institution. It did not know the first thing about how such a bank should be governed, he said.

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Opponents of the AIIB whispered that it would lend to dictators, despoil the environment and trample on human rights. (Western institutions, of course, have never done any such thing.) The AIIB may turn out very differently from this caricature.

It is just possible that it will even exceed the standards of existing institutions. With 57 members, including Europeans such as the UK, Germany and Sweden, it is evolving fast and may end up an entirely different institution from the one Beijing envisaged.

Last week, members met in Singapore to draw up articles of agreement. With input from both China, which has proved it knows a thing or two about development, and western countries, which have a better record of implementing safeguards, the project has made a promising start.

The bank will have initial capital of $100bn, double that originally intended. That will make it a serious challenger to the Asian Development Bank, the 50-year-old Tokyo-dominated regional bank with capital of $150bn. China will have the biggest capital quota, probably about 25 per cent. India will have the second-largest, then Russia, Germany, Australia and Indonesia. Overall, 75 per cent of the bank’s capital — and therefore voting rights — are likely to be Asian. Initial indications are that China will not have a veto.

The bank will be based in Beijing. It will have a non-resident board that meets periodically in the Chinese capital and convenes by video conference. At first glance, this could raise the suspicion that the AIIB will have less rigorous oversight than the World Bank, with its resident board that approves all loans. Yet many see the World Bank board as expensive — it costs $70m a year — and cumbersome.

David Dollar, a World Bank veteran who has acted as an unpaid consultant to the AIIB, says the World Bank had become so slow and risk-averse that most governments had stopped coming to it for infrastructure financing. He quotes an Indian official, exasperated at the pace of World Bank-sponsored projects, as saying: “Mr Dollar, the combination of our bureaucracy and your bureaucracy is deadly.”

The hope, he says, is that the AIIB can combine the best of both worlds. “The enthusiastic response of developing countries in Asia to the AIIB concept reflects their sympathy with the idea that a bank can have good safeguards and still be quicker and more efficient than the existing banks,” he writes.

In Jin Liqun, tipped to become the AIIB’s first president, China’s new institution has one of the country’s most experienced technocrats. He is a former deputy finance minister and a former ADB vice-president. His job will not be easy. With such high-profile western involvement, the AIIB will find its projects (a dam in Myanmar here, a highway through an Indonesian township there) scrutinised by board members from the likes of Germany. By inviting in so many foreign participants, Beijing has probably given up on the idea that the AIIB can be a crude instrument of Chinese diplomacy. It may even be having buyers’ regret.

In one way, though, the bank is a success before it has even started. It has triggered what one commentator calls “infrastructure wars”. The ADB has performed some accounting magic in order to increase the amount it can lend. ADB officials say the bank will review approval procedures so that it can match the AIIB’s expected greater speed. On the day that AIIB members met in Singapore, Shinzo Abe, Japan’s prime minister, announced that Tokyo would make $110bn available for infrastructure projects in Asia over five years. These, he implied, would be of higher quality than those led by China.

Like Groucho Marx, Japan and the US are not rushing to join the new club. Yet if the AIIB proves as effective as its advocates hope, before long even Tokyo and Washington may be angling for membership.

Looking back at the past few years, China is having a tough time pushing through in Africa, Asia, Europe and Latin America, and even North America. The problem is a classic one, one that Chinese leaders shouldn't have missed.

得人心者得天下, those that have the heart of the people have the world. 名不正,则言不顺;言不顺,则事不成; If the cause is not just, then the battle cannot be won. 挟天子以令诸侯, control the emperor to control the nobility.

Ancient Chinese teachings that China has forgotten, but is looking like it is back on track. The AIIB serves all three purpose. China controlling the AIIB or having the veto is counterproductive to Chinese objectives, which isn't the reigning Super Power, that isn't achievable for anyone in another ten years, but to challenge for the throne of First Amongst Equals.

First the bank will establish Chinese credentials of willing partner, and willing to work in an international environment, taking the advice of our friends and friendly nations seriously. It will greatly improve China's image as a nation that works well with others, and ease the feelings of neighbors, and partners alike. At the least it will act as a glowing example of China to take on any negativity some of our partners like to project of us.

No matter how just our claims and responsibility to sovereignty and to helping others achieving economic development(albeit realistically), the Asian crisis and African image problem has shown China, any unilateral move, without the support of at least some of the world's elite nations will turn into a disaster, no matter what our intentions.

The AIIB will form the basis of further Chinese led initiatives that will encompass the entire world, and as time goes by, friends are formed, reputation built, and a precedent is established. Only with the mandate of the world, can China push through with our plans unhindered by much negative repercussions and allow for greater speed and ease in our daily dealings.

The last one is essentially the same as a unilateral approach, but with the caveat that China will be the dominate force behind the world's organizations, but in today's day and age, the non-exclusive force in the world's organizations.

With the AIIB China has set the precedent of Chinese dominance, which gives us unrivaled privileges and power to influence votes, and perceptions. With it, a more influential China will emerge from it, economic and military power can only take us so far, but a mandate from the world, however influenced and came about, is a far more powerful tool to have.

To all those, especially the one dude, you know who you are, that seems to insult us by making us to be a rogue nation that will fire randomly, know this, the US can actually contain China if China fires that first shot. However, as long as we don't, the initiative will be with us, and there is nothing the US can do to stop us from achieving all that would give us, at least, matching powers that the US currently enjoys.

To summarize, a Chinese dominated initiative with China being the sole voice, does more harm than good, and powerless can sometimes be turned into unequaled power. Thousands of years of Chinese history has shown us the way, now it is up to us to seize the moment.

 

[Echo_419]

A bank made in China and better than the western model

Read this article if you like, I agree with a lot of what it's saying, but one point. China's role and expectations of the AIIB and why there isn't or shouldn't be any buyer's remorse, instead China is charting a new course and working within an international structure, though, in our favor, rather than the US, but not overly so.




Looking back at the past few years, China is having a tough time pushing through in Africa, Asia, Europe and Latin America, and even North America. The problem is a classic one, one that Chinese leaders shouldn't have missed.

得人心者得天下, those that have the heart of the people have the world. 名不正,则言不顺;言不顺,则事不成; If the cause is not just, then the battle cannot be won. 挟天子以令诸侯, control the emperor to control the nobility.

Ancient Chinese teachings that China has forgotten, but is looking like it is back on track. The AIIB serves all three purpose. China controlling the AIIB or having the veto is counterproductive to Chinese objectives, which isn't the reigning Super Power, that isn't achievable for anyone in another ten years, but to challenge for the throne of First Amongst Equals.

First the bank will establish Chinese credentials of willing partner, and willing to work in an international environment, taking the advice of our friends and friendly nations seriously. It will greatly improve China's image as a nation that works well with others, and ease the feelings of neighbors, and partners alike. At the least it will act as a glowing example of China to take on any negativity some of our partners like to project of us.

No matter how just our claims and responsibility to sovereignty and to helping others achieving economic development(albeit realistically), the Asian crisis and African image problem has shown China, any unilateral move, without the support of at least some of the world's elite nations will turn into a disaster, no matter what our intentions.

The AIIB will form the basis of further Chinese led initiatives that will encompass the entire world, and as time goes by, friends are formed, reputation built, and a precedent is established. Only with the mandate of the world, can China push through with our plans unhindered by much negative repercussions and allow for greater speed and ease in our daily dealings.

The last one is essentially the same as a unilateral approach, but with the caveat that China will be the dominate force behind the world's organizations, but in today's day and age, the non-exclusive force in the world's organizations.

With the AIIB China has set the precedent of Chinese dominance, which gives us unrivaled privileges and power to influence votes, and perceptions. With it, a more influential China will emerge from it, economic and military power can only take us so far, but a mandate from the world, however influenced and came about, is a far more powerful tool to have.

To all those, especially the one dude, you know who you are, that seems to insult us by making us to be a rogue nation that will fire randomly, know this, the US can actually contain China if China fires that first shot. However, as long as we don't, the initiative will be with us, and there is nothing the US can do to stop us from achieving all that would give us, at least, matching powers that the US currently enjoys.

To summarize, a Chinese dominated initiative with China being the sole voice, does more harm than good, and powerless can sometimes be turned into unequaled power. Thousands of years of Chinese history has shown us the way, now it is up to us to seize the moment.

Great news we will have the 2nd largest share in the bank

 

[Genesis]

Great news we will have the 2nd largest share in the bank

This is a good first step for India too, though India still needs more time, economic pull, and prestige, before she is able to move forward diplomatically.

Though at the same stage, India is ahead of China, partly because there was no China when China was rising, partly because there hardly was a need at the time, either way circumstances don't matter, what matters is it has happened.

Either way, SCO, BRICS Bank, AIIB, and a few other things like one belt one road, Asian free trade agreement pacts are good beginnings by China, while India's position as the second most important nation in AIIB is certainly a rise for its prestige and influence.

How India moves forward from this, will be interesting.

 

[Echo_419]

This is a good first step for India too, though India still needs more time, economic pull, and prestige, before she is able to move forward diplomatically.

Though at the same stage, India is ahead of China, partly because there was no China when China was rising, partly because there hardly was a need at the time, either way circumstances don't matter, what matters is it has happened.

Either way, SCO, BRICS Bank, AIIB, and a few other things like one belt one road, Asian free trade agreement pacts are good beginnings by China, while India's position as the second most important nation in AIIB is certainly a rise for its prestige and influence.

How India moves forward from this, will be interesting.

We will most likely continue our non aligned status & focus on domestic issues