vendredi 20 mars 2015
China's Place in the New World Economic Order
Posted on 09:07 by nice news
Competition between the world's two greatest economic powers is both inevitable and (for the most part) beneficial. This is the case even when China and the U.S. are arguing over control of increasingly obsolescent international financial institutions.
China's effort to start the new Asian Infrastructure Investment Bank grows more popular by the day, despite U.S. resistance to the idea. The question is no longer whether the bank will fulfill an unmet need, but how best to ensure that it contributes to Asian growth -- and, not incidentally, draws China more deeply into the global financial order.
Now that the U.K. and several other European countries have joined the bank, holdouts such as Australia and South Korea are almost certain to jump in. This counts as a soft-power victory for China over the U.S., which reportedly lobbied allies not to sign up. But Washington largely has itself to blame. For years, the U.S. has called on China to bind itself to international norms and financial institutions -- without making room for it to do so. Congress persists in blocking efforts to dilute U.S. dominance of the World Bank or to increase China’s voting share at the International Monetary Fund, which stands at less than 4 percent, compared with almost 17 percent for the U.S.
That’s not to say the U.K. and others have joined the new bank out of altruism; London is clearly eager to establish itself as the main offshore trading hub for the renminbi. And the economic rationale for the bank -- in an era when the World Bank itself is facing something of an existential crisis and the global market for private capital is robust -- may be diminishing. Nevertheless, the region has huge infrastructure needs -- up to $800 billion worth every year, according to a much-cited study from the Asian Development Bank. American opposition to any new source of
China's effort to start the new Asian Infrastructure Investment Bank grows more popular by the day, despite U.S. resistance to the idea. The question is no longer whether the bank will fulfill an unmet need, but how best to ensure that it contributes to Asian growth -- and, not incidentally, draws China more deeply into the global financial order.
Now that the U.K. and several other European countries have joined the bank, holdouts such as Australia and South Korea are almost certain to jump in. This counts as a soft-power victory for China over the U.S., which reportedly lobbied allies not to sign up. But Washington largely has itself to blame. For years, the U.S. has called on China to bind itself to international norms and financial institutions -- without making room for it to do so. Congress persists in blocking efforts to dilute U.S. dominance of the World Bank or to increase China’s voting share at the International Monetary Fund, which stands at less than 4 percent, compared with almost 17 percent for the U.S.
That’s not to say the U.K. and others have joined the new bank out of altruism; London is clearly eager to establish itself as the main offshore trading hub for the renminbi. And the economic rationale for the bank -- in an era when the World Bank itself is facing something of an existential crisis and the global market for private capital is robust -- may be diminishing. Nevertheless, the region has huge infrastructure needs -- up to $800 billion worth every year, according to a much-cited study from the Asian Development Bank. American opposition to any new source of
China's Place in the New World Economic Order
Categories: Chinas Place in the New World Economic Order
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