Reinhard Krause / Reuters A spectator waves a Chinese flag in front of a statue of Chairman Mao Zedong in Kashgar, Xinjiang province, June 18, 2008.

Should Washington Fear the AIIB?

Foreign Affairs' Brain Trust Weighs In

We at Foreign Affairs have recently published a number of pieces on the Asian Infrastructure Investment Bank (AIIB). Those articles sparked a heated debate, so we decided to ask a broad pool of experts to state whether they agree or disagree with the following statement and to rate their confidence level about that answer:

The AIIB represents the start of a fundamental challenge to the current global multilateral order.

Results:

Full Responses:

SALVATORE BABONES is Associate Professor of Sociology and Social Policy at the University of Sydney, in Australia.
Agree, Confidence Level 6              

The Asian Infrastructure Investment Bank (AIIB) is certainly the start of a challenge, but it is not necessarily an effective challenge. Its $100 billion capitalization was immediately topped by a Japanese counteroffer of $110 billion for Asian development projects.

IAN BREMMER is President of Eurasia Group and the author of Every Nation for Itself: What Happens When No One Leads the World.
Agree, Confidence Level 9              

China is the only major country in the world today with a global economic strategy. Beijing now intends to challenge the U.S.-led global economic order, while largely accepting the U.S.-dominated military status quo. The AIIB is one of many important pieces of this effort.

YUN-HAN CHU is Distinguished Research Fellow of the Institute of Political Science at Academia Sinica and Professor of Political Science at National Taiwan University.
Strongly Agree, Confidence Level 9           

It represents a fundamental challenge to a U.S.-centered world order.

WARREN I. COHEN is Distinguished University Professor Emeritus at UMBC.
Agree, Confidence Level 8

The current order should be—and will be—changed. U.S. opposition to AIIB is foolish. It should participate and help steer changes in a salutary direction.

ALEXANDER COOLEY is Professor of Political Science at Barnard College.
Agree, Confidence Level 8              

The relationship between the AIIB and the future global multilateral order has been mostly conceptualized as a "top-down" issue—a function of the geopolitical agendas and strategies of major states. Accordingly, the decision of major allies and partners to buck Washington's public concerns and join as founding members was perceived as a blow to U.S. international influence and authority. Less acknowledged, but probably more critical, however, will be future "bottom-up" dynamics, or how borrowing states themselves leverage the AIIB. If they use the new institution to substitute for Western lenders and/or to push back and bargain against the politically intrusive conditions or governance standards demanded by Western international financial institutions, then the AIIB has the potential to more rapidly evolve into an alternative patron and global governor, irrespective of the actual intentions of China and the rest of its member states.

DANIEL W. DREZNER is Professor of International Politics at the Fletcher School of Law and Diplomacy at Tufts University.
Strongly Disagree, Confidence Level 7

JESSICA EINHORN is former Dean of Washington's Paul H. Nitze School of Advanced International Studies (SAIS) of Johns Hopkins University and former Managing Director at the World Bank.
Disagree, Confidence Level 7       

The AIIB is a regionally based institution, which builds on the enduring relevance of multilateral cooperation for economic development. It is testament to Bretton Woods, which remains its model.

M. TAYLOR FRAVEL is Associate Professor of Political Science and a member of the Security Studies Program at MIT.
Disagree, Confidence Level 8

AARON L. FRIEDBERG is Professor of Politics and International Affairs at Princeton University.
Agree, Confidence Level 8              

AIIB needs to be seen in a broader context: it is part of a larger Chinese effort to create a set of new economic and political institutions and an expanding network of physical infrastructure projects that will have Beijing at their center. China is attempting to build a new regional order in Asia that will be nested within, but also separate from, the existing global order.

FRANCIS FUKUYAMA is a Senior Fellow at the Center on Democracy, Development, and the Rule of Law at Stanford University. 
Agree, Confidence Level 8              

I would use the word "change" rather than "challenge." Challenge implies that it is necessarily something threatening, and I'm not sure that's true.

MATTHEW P. GOODMAN is a senior adviser for Asian economics and holds the William E. Simon Chair in Political Economy at the Center for Strategic and International Studies.
Disagree, Confidence Level 7       

The AIIB is likely to be too small, slow, and similar to existing multilateral institutions to fundamentally disrupt the global order. For now, Beijing seems more interested in gaining international “space” and commercial advantage than upending current rules and norms, which have served China’s interests extraordinarily well. But this is unlikely to be the last Chinese initiative of its kind, and Beijing still has some work to do in answering the many governance and operational questions that surround the AIIB.

JEAN-MARIE GUÉHENNO is President and CEO of the International Crisis Group.
Agree, Confidence Level 7

SEBASTIAN HEILMANN is Founding Director of the Mercator Institute for China Studies in Berlin and Professor for the Political Economy of China at the University of Trier, Germany.
Disagree, Confidence Level 6

In the first stage, AIIB and other parallel structures sponsored by China are designed to challenge and complement, not to demolish, existing institutions. Since many U.S. allies are taking part in AIIB, open rivalry with the World Bank or Asian Development Bank will be limited.

In subsequent stages, if novel China-centered institutions and initiatives retain their credibility and attraction to other countries, the AIIB may come to be seen as the starting point of a fundamental challenge to the current global multilateral order. But whether such a challenge can materialize hinges on many factors that are not completely under the control of China's government: maintaining domestic economic growth, avoiding financial overstretch in international commitments, and avoiding open conflict with the United States and neighbors in the Asia-Pacific. I see high risks of financial overstretch and overcommitments in China's current diplomacy. Therefore, I doubt the emergence of a fundamental challenge to the global multilateral order.

YANZHONG HUANG is a Senior Fellow for Global Health at the Council on Foreign Relations and Associate Professor at the John C. Whitehead School of Diplomacy and International Relations at Seton Hall University.
Disagree, Confidence Level 8       

China's reemergence as a global power and its dissatisfaction with existing international order have led to its investment in building alternative multilateral institutions. If we consider the Shanghai Cooperation Organization built in 2001, however, AIIB is definitely not the first time Beijing has sought to advance alternative institutional options. It is premature to view AIIB as a fundamental challenge to the current international financial order. Thus far, there has been no major change in the rules of the game: China is expected to have veto power in the AIIB, much like the United States in the International Monetary Fund (IMF); it continues valuing internalization of select international rules, such as accountability and transparency.

YUKON HUANG is a Senior Associate in the Carnegie Asia Program.
Agree, Confidence Level 7              

The challenge is the result of a flawed U.S. response. If the United States had embraced the idea, the creation of the AIIB would have been more of a minor event.

RICHARD KATZ is Editor of The Oriental Economist Report.
Strongly Disagree, Confidence Level 8    

To be sure, the AIIB is China's attempt to wield greater influence, but it can also represent an example of China taking on the role of "responsible stakeholder" that many U.S. officials have called for. We cannot have the latter without the former. Rather than futilely trying to get the United States’ friends and allies not to participate in AIIB, the Barack Obama administration should have focused on making sure that AIIB follows proper standards of operation. Sledgehammer opposition gives credibility to those in China who falsely claim the United States is trying to contain even a peaceful rise by China.

PARAG KHANNA is an author and Managing Partner of Hybrid Reality, a geostrategic advisory firm.
Strongly Agree, Confidence Level 10        

The AIIB is actually the institutionalization of 25 years of infrastructure-focused Chinese diplomacy on its periphery. It is the culmination of a process long under way, and it will only accelerate in the coming decade.

DAVID M. LAMPTON is George and Sadie Hyman Professor of China Studies and Director of the SAIS-China program at the Johns Hopkins School of Advanced International Studies.
Strongly Disagree, Confidence Level 9    

The current multilateral "order" already has many institutions with overlapping but not identical memberships. So now we have one more institution. Fifty-seven major players in the existent order have agreed to participate and shape the new institution, with international legal advice. If properly pursued, this institution should help build infrastructure that promotes interdependence. A principal determinant of whether this will be a challenge is whether or not the United States reacts to it as such, rather than as an opportunity to strengthen the order. The principal multilateral institutions of the current order, the World Bank and the Asian Development Bank, have said they will cooperate with it.

ERIC X. LI is a venture capitalist and political scientist in Shanghai.
Disagree, Confidence Level 3       

The AIIB is a practical solution to practical problems. China has excess capital and capacity. The rest of the developing world has tremendous need for infrastructure that is not being met by existing financial institutions. And, judging from its recent history, China knows a thing or two about infrastructure building and development. The AIIB does not represent a threat to the current global order. It has the potential to enhance it. However, the United States and Japan are running the risk of turning it into a threat. By opposing this initiative, which is welcomed by just about everyone else, the United States and Japan are repeating the same mistake the Soviet Union made during the Cold War—placing their political agenda above economics. This can be self-defeating, to say the least.

KENNETH LIEBERTHAL is a Senior Fellow in Foreign Policy and Global Economy and Development at the Brookings Institution.
Disagree, Confidence Level 8

JAMES M. LINDSAY is Senior Vice President, Director of Studies, and Maurice R. Greenberg Chair at the Council on Foreign Relations.
Disagree, Confidence Level 7       

The AIIB does challenge the existing global multilateral order, but the significance of that challenge remains to be determined. Much will depend on how China uses its dominant role in the new bank and whether and how the United States and others remake legacy international financial institutions in response. Rather than transforming the global multilateral order, the AIIB could end up helping to reinvigorate it.

WINSTON LORD is Chairman Emeritus of the International Rescue Committee. He was U.S. Ambassador to China from 1985 to 1989 and Assistant Secretary of State from 1993 to 1997.
Disagree, Confidence Level 9       

This will be an addition, hopefully a complementary one, to the current order. The challenge is to ensure that it meets certain norms.

BAOZHEN LUO is Assistant Professor in the Sociology Department at Western Washington University.
Disagree, Confidence Level 9       

My understanding is that the AIIB, although it takes a different approach to financing development needs in Asia from those of the existing multilateral developmental banks (for example, the IMF, the World Bank, and the Asian Development Bank), has no intention of challenging or overpowering them. Rather, it works alongside the existing governing bodies and complements them in tackling regional problems.

That said, if the status quo powers of current order can respond to the emergence and success of the AIIB with a collaborative and constructive approach, the AIIB can certainly present an opportunity for much-needed reforms in the current multilateral institutions, which will be good for the recovery and growth of world economy. So in that sense, it is a challenge—a good challenge.

DAMIEN MA is a Fellow at the Paulson Institute, focused on investment and policy programs and the institute’s research and think tank activities.
Disagree, Confidence Level 9

SEBASTIAN MALLABY is Paul A. Volcker Senior Fellow for International Economics at the Council on Foreign Relations.
Disagree, Confidence Level 8       

ANDREW J. NATHAN is Class of 1919 Professor of Political Science at Columbia University.
Strongly Disagree, Confidence Level 10 

If the "current global multilateral order" involves wealthier countries lending money to poorer countries to advance their economic development with infrastructure projects, then this is just more of the same. From all indications so far, the new bank will use lending standards that are similar to those used by the World Bank. Although this is a new player in the international system, it reaffirms rather than overturns the rules by which an international system operates.

LYNETTE ONG is Associate Professor of Political Science at the Munk School of Global Affairs at the University of Toronto. She is the author of Prosper or Perish: Credit and Fiscal Systems in Rural China.
Disagree, Confidence Level 8       

Although there are concerns over what standards the AIIB will adopt, investments to help finance much-needed infrastructure projects in Asia, which complement the missions of the Asian Development Bank and World Bank, should be welcome.

MINXIN PEI is Tom and Margot Pritzker ’72 Professor of Government at Claremont McKenna College.
Disagree, Confidence Level 8       

It is too early to say what difference the AIIB will make in terms of changing the post–World War II international financial order. Given the complexity and difficulties involved in making a new international financial institution work and the financial and human resources required, it is unwise to claim that the formation of this new institution, by itself, represents a fundamental challenge to the existing global order. Of course, China may have such intentions, but that is different from saying that it has already succeeded. One can actually conceive of several scenarios in which the AIIB fails to deliver on its promises. In retrospect, we may look at the rhetoric about this new bank as nothing but hype.

JOHN POMFRET is a longtime correspondent for The Washington Post and a former Adjunct Senior Fellow at the Council on Foreign Relations.
Disagree, Confidence Level 10    

The U.S. reaction to the AIIB was foolish. There are many areas in which China does challenge the global multilateral order, but not here.

DAVID SHAMBAUGH is Professor of Political Science and International Affairs and Director of the China Policy Program at the Elliott School of International Affairs, George Washington University.
Agree, Confidence Level 9              

The AIIB is only one step among several that China has been taking in recent years to establish regional organizations in virtually every region of the world. I see the AIIB and these other institutions as essentially complementary and not redundant of, or confrontational to, the existing postwar liberal order. There is room in the world, and in Asia, for overlapping institutional architectures. This said, I will be watching carefully to see if these institutions (AIIB, BRICS Development Bank, Shanghai Cooperation Organization, Forum on China-Africa Cooperation, China-Arab Cooperation Forum, and so on) begin to take on a distinct anti-Western and illiberal cast. If so, then it is a negative development. But I do not think we should ipso facto jump to the conclusion that these Chinese-inspired institutions are inherently revisionist. Time will tell, and the presence of democratic states as governing members will hopefully be insurance against such a development.

JAMES STEINBERG is Dean of the Maxwell School of Citizenship and Public Affairs and Professor of Social Science, International Affairs, and Law at Syracuse University.
Strongly Disagree, Confidence Level 9    

All-out U.S. opposition has made AIIB far more consequential than it need have been.

XIAO QIANG is an Adjunct Professor at the School of Information of the University of California–Berkeley and Founder and Editor in Chief of China Digital Times.
Neutral, Confidence Level 1         

YANG YAO is a Professor at the China Center for Economic Research and the National School of Development, Peking University.
Neutral, Confidence Level 7         

The answer depends on how China and the United States handle AIIB. If the two countries do not approach each other, AIIB and the New Development Bank will become a challenge to the current order; but if they do, particularly if the existing power (that is, the United States) accommodates China in the current order, the two new banks can become complements to the current multilateral order.

Related Articles

This site uses cookies to improve your user experience. Click here to learn more.

Continue

Close We are offering free and open access for a short period of time. Read more about why we are doing this.

Days
Hrs
Min
Sec