AIIB aims at shared benefits, not vanity

Source:Global Times Published: 2015-4-3 0:33:01

The application of over 50 economies for founding member status in the China-initiated Asian Infrastructure Investment Bank (AIIB) has surprised the world. It was also followed by some discouraging voices, some of which even emanate from our domestic field of public opinion. Yet experiencing a little chill wind isn't necessarily a bad thing. It will serve as a warning to remind us not to be conceited in the moment of success.

However, an explanation is still needed for those absurd arguments, in order to set the record straight.

Some are fundamentally rejecting the establishment of the AIIB, claiming it is a vanity project, which will do more harm than good to China. According to an online article promoting this view, there is too much risk over infrastructure investment in developing countries. China should continue to purchase US treasury bonds with our surplus foreign exchange, while arguing that helping the development of developing countries will be nurturing our future competitors.

It seems that the person who wrote this article does know a bit about finance, but is absolutely clueless when it comes to the competition of international multilateral financial institutions or the growing process of major powers. The world economy does not follow standard economic theory, but the rules of the "political economy."

The world has clearly understood that the AIIB will be an important breakthrough in the international orders. Despite the fact that this was not our intention, it is after all a good start for China.

The AIIB is not just a bank with the mission of external development, but it is an international multilateral financial organization with interests- and risk-sharing mechanisms. If the AIIB really is a bum deal, then why have policy makers from so  many countries decided to join?

Chinese often lack confidence and are suspicious toward the outside world. Sometimes we even have no idea how to deal with success. With this many nations joining the AIIB, some people are afraid to be fooled by the more experienced game players. Those fears are normal, since we are indeed short of experience.

Nevertheless, continuing to learn as well as practicing is vital for being a major power.

All great powers learned their lessons from failures. And we will pay much more if we only act like a parrot and copy others' experience.

China has set up the China Development Bank and Import-Export Bank to encourage Chinese companies to expand in overseas markets. Supporting domestic enterprises to go global with  state funds is a common experience shared by the major powers around the world.

Yet the AIIB is not another Chinese "Development Bank" or "Import-Export Bank." And the increasingly high popularity of the AIIB is not for vanity, but reveals a crucial political significance. More challenges will come to the AIIB in the future. There is no point in being humble about our accomplishment, and we will persevere to our utmost to achieve more success in the future.

Posted in: Editorial, Commentary

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