U.S. allies rush to join World Bank alternative
One likely agenda item during U.S. Treasury Secretary’s meetings with Chinese officials at the end of March: the Asian Infrastructure Investment Bank that China is launching to supplement existing global development funds like the World Bank. The United States tried to keep its allies from joining the project.
The U.S. warned other countries that China’s new institution might not give enough attention to things like environmental concerns or fairness in awarding contracts.
“I think there’s a lot of concern on the U.S. side that this institution would become an instrument of Chinese foreign policy,” says Robert Kahn, a fellow at the Council on Foreign Relations.
The U.S. didn’t prevail. Founding members of the Chinese-led bank include most Asian countries, and key European allies like France, Italy, Germany and the United Kingdom.
The U.S. should join too, says C. Fred Bergsten, a senior fellow at the Peterson Institute for International Economics. He doubts the governance issues will be a problem.
“Because the Chinese have been suspect on these issues, they will lean over backwards to follow international best practices,” he says. “My guess is, they’re going to be holier than the Pope.”
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