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South China Morning Post, Hong Kong

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Why Asia and the Misguided West Desperately Need the AIIB (News, Switzerland)

 

"In mainstream media in America and Europe, judgment has been passed more or less in unison. It is a conclusion that came about as a result of poor reasoning and a skewed analysis of the facts. According to estimates by the Asian Development Bank, where the largest shareholder is Japan, infrastructure requires an annual investment of $750 billion per year until 2020. This is beyond the capacity of the ADB, which in 2012 granted loans valued at only $7.5 billion. … Overall, this China-led regional financial institution is quite complementary to existing U.S.-led Bretton Woods institutions: the International Monetary Fund, World Bank or Asian Development Bank."

 

By Peter Achten

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Translated By Stephanie Martin

 

April 13, 2015

 

News – Switzerland – Original Article (German)

China is founding a new global development bank. The United States is not amused. Is the predominance of Bretton Woods institutions and the dollar as the reserve currency at risk?

 

China is said to be striving for geopolitical as well as financial and economic dominance.  Led by The Wall Street Journal, the mouthpiece of capital, and leading mainstream media in America and Europe, including Switzerland of course, judgment has been passed more or less in unison. It is a conclusion that came about as a result of poor reasoning and a skewed analysis of the facts. What has clearly changed, however, are global atmospheric conditions with respect to finance, economics and power politics.

 

For decades, the global center of gravity has been gradually shifting from the Atlantic to the Pacific. Yet Western commentators, economists, bankers, analysts and other assorted pundits who remain mired in Euro-centric thinking could not or would not comprehend that after 500 years of European and Western cultural supremacy, a new world is in the process of emerging - one no longer under U.S. hegemony, but multipolar instead.  Asia has caught up rapidly in recent decades. First it was Japan, then the four tigers or dragon nations of South Korea, Taiwan, Hong Kong and Singapore, then Thailand and Malaysia and finally, heavyweights China, India and Indonesia.

 

Now that it is economically fortified, China has established the Asian Infrastructure Investment Bank or AIIB and is sending a clear financial and development policy signal that a new economic world order is emerging. This comes 70 years after the creation of the Bretton Woods institutions at the end of WWII - the International Monetary Fund (IMF), the World Bank (WB) and its offshoot, the Asian Development Bank (ADB).

 

Washington immediately responded with rejection. A spasmodic White House sought to prevent its closest European ally, Great Britain, from becoming a founding member of AIIB. In vain. Diplomatic pressure from America fizzled with other Western nations as well.  New Zealand, Australia, South Korea, Brazil, India, Russia and South Africa, but also the U.S. allies Germany, France, Italy and yes, even Switzerland, Luxemburg and Austria - and 23 other countries - are now included as founding members.

 

By the target date of March 31, a total of 44 countries applied to be founding members.  Among them is also - in Beijing's view - the "renegade" province of Taiwan. China has responded to Taiwan's application favorably. At the very last moment the Americans suddenly became more flexible, apparently influenced by the participation of its closest European allies. In talks held in Beijing on March 30th with Premier Li Keqiang, U.S. Treasury Secretary Jack Lew expressed cautious optimism. Lew stated diplomatically that the United States welcomes and supports proposals that promote an improved international financial structure. Washington was ready to talk.

 

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Twitter@CurtisSChin

 

As always when it comes to financial and economic issues, China proceeds with pragmatism and flexibility. The creation of the AIIB should be seen against the backdrop of a new Chinese Silk Road strategy. Shortly after taking office two and a half years ago, head of state and party leader Xi Jinping outlined his new view of things, not just for China, but for South Asia, Eurasia and Europe: The Silk Road must be reinvigorated on land and sea to benefit all people in Asia, Europe and beyond. The improvement and expansion of infrastructure is the first necessary step toward achieving that goal. That's no surprise. This means the improvement and expansion of airports, container terminals, deep-water ports, telecommunications systems, energy and above all, the intercontinental Eurasian railway system. The investment required is enormous. Just one example: In Indonesia alone, the government estimates that a half a trillion dollars in investment is required to improve the ailing infrastructure. Or: According to estimates by the Asian Development Bank, where the largest shareholder is Japan, infrastructure requires an annual investment of $750 billion per year until 2020. This is beyond the capacity of the ADB, which in 2012 granted loans valued at only $7.5 billion.

 

Against this backdrop, the name of the new bank - "Asian Infrastructure Investment Bank" – is perfectly understandable. A closer look reveals that overall, this China-led regional financial institution is quite complementary to existing U.S.-led Bretton Woods institutions: the International Monetary Fund, World Bank or Asian Development Bank.

Posted By Worldmeets.US,

 

Just recently, a presentation at the annual Boao Forum on the southern Chinese island of Hainan provided an opportunity to learn more about the Chinese initiative under the theme "Asia's New Future - Toward a Common Destiny." Asian heads of state and government flocked to the presentation. Internationally, though, the powwow was poorly attended. Austria was the highest-ranking European country to attend and there was nary to be found a Swiss Federal Councilor, almost always to be had for a little trip. After all, the Silk Road strategy was outlined again in more detail by head of state and party leader Xi Jinping. Yet the Boao Forum in contrast to the World Economic Forum, barely warranted a mentioned in Western media.

 

In Western capitals and media, the question is now being asked is whether creation of the AIIB is a now, separate version of the Bretton Woods institutions. China, they say, is now seeking hegemony over international financial matters. Is this the "beginning of the end of the dollar's global dominance?," puzzled financial analysts in Frankfurt, Zurich, London or New York whisper inquiringly. Yet in Tokyo, Hong Kong and Singapore, analysis was more precise and relaxed.

 

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Hysterical U.S. Response to AIIB Diminishes American Influence (Huanqiu, China)

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"All this," said a commentator from the daily Global Times - an offshoot of another state mouthpiece, namely the Renimin Ribao, the voice of the Communist Party - "has nothing to do with the truth." Historically, the situation is different from what it was when the Bretton Woods institutions were created in 1944. The AIIB will not turn the global financial order on its head. "On the contrary, the spirit of the AIIB," according to the Global Times commentator, "is one of diversity and fairness."

 

Also, with respect to the dollar as the current global reserve currency, China is taking a relaxed stance. "The Bretton Woods system is a product of the old days," judges the Global Times. New global trends created the AIIB and there is no reason now to look back to the old days of a single currency." 

 

The International Monetary Fund and consequently the United States has already responded below the radar of the general public. As IMF chief Christine Lagarde said recently in a speech at Shanghai's Fudan University, negotiations are underway to include China in the IMF's special drawing rights – a kind of artificial currency.

 

In addition to the dollar, the euro, the British pound and the Japanese yen, the Chinese yuan will be part of the IMF "currency basket." Of course, this isn't the end of the dollar's global dominance, but the beginning of the end - or the beginning of the transition to a multipolar global structure.

 

 

MORE FROM CHINA ABOUT THE UNITED STATES:
South China Morning Post, Hong Kong:
China-Led AIIB Challenges U.S. Dominance
Huanqiu, China:
'Three Forbids' Barring Western Influence in Universities are 'Misunderstood'
Huanqiu, China:
Condemn Paris Attacks … and Western Cultural Insensitivity
Huanqiu, China:
The Interview: The Latest Reflection of American Cultural Arrogance
Le Figaro, France:
Xi and Putin: United in the Face of Western Critics
National Post, Canada:
Talk of 'Significant Progress' on TPP 'Pure Bureaucratic BS'
Philippine Star, The Philippines:
Aquino Gave Obama 'Everything for Nothing'
China Daily, China:
Obama's 'Un-Neighborly' Asia Tour
Philippine Daily Inquirer:
U.S. Hardware, Not Nationalist Rants, Can Defend the Philippines
Manila Times, The Philippines:
Aquino Defense Pact with Washington 'Unconstitutional'
Manila Times, The Philippines:
Filipinos, African-Americans and the 'Black Man's Burden'
Philippine Daily Inquirer:
Except for his Dark Skin, Obama Can Do No Wrong in Philippines
Sankei Shimbun, Japan:
Whaling Advocate Wants Obama Served Whale Meat

People's Daily, China:
Who are Obama and Hagel to Preach 'Responsibility' to China?

Xinhua, China:
Japanese Right 'Hijacking' Obama's Asia Pivot
Huanqiu, China:
Hagel Must Be Told: China is Not Russia
Global Times, China: Biden Should 'Show Kindness' Toward China
Daily Tribune, Philippines: China ADZ 'Should Not Have Been Done': Philippines Defense Chief
People's Daily, China: U.S. and Japan Must Be Shown: 'White is Not Black'
Global Times, China: Continued Dependence on America is Bad for Japan
Huanqui, China: China Must Show 'Courage of its Convictions' in Face of Japan-U.S. Hostility
Huanqui, China: For Helping America Return to Asia, Vietnam will ‘Feel China's Pain’
Huanqui, China: Confronting America Requires Wisdom and Stamina – Not Warships
Global Times, China: China Must Draw a Red Line Against U.S. 'Encirclement'
Global Times, China: Vietnamese Should Beware of U.S.' 'Suspicious Cozying Up'
Mainichi Shimbun, Japan: China 'Must Not Be Permitted' to Push Around Neighbors
Global Times, China: America ‘Disqualified’ as Global Human Rights Judge
Xinhua, China: Human Rights Record of the United States in 2011
Rodong Sinmun, North Korea: America by Far World’s Leading Human Rights Abuser
Yezhednevniy Zhurnal, Russia: Putin is Mistaken to Favor China Over the United States
Huanqiu, China: U.S. Should Keep its Nuclear Weapons Away from Koreas
Global Times, China: America ‘Disqualified’ as Global Human Rights Judge
Ibaraki Shimbun, Japan: Embarrassing Words of Japan's Leaders 'Ring Absurdly Hollow'
Mainichi Shimbun, Japan: Oliver Stone Tells Japan: 'Admit Wrongs; Stand Up to U.S.'
Asahi Shimbun, Japan: Oliver Stone Urges Young Japanese to Learn Their History
Global Times, China: China Must Warn the World of Japan's Growing 'Insanity'
The Hankyoreh, South Korean: On Korean Independence Day, Japan Must Admit to its Crimes
JoongAng Ilbo, South Korean: Like Germans and Nazis, Japanese Must Admit to Imperial Crimes
Nara Shimbun, Japan: Japanese Must Continue to Lead 'Battle' to Abolish War
JoongAng Ilbo, South Korea: U.S. Shielding of Emperor Hirohito Behind Japan's Denial of History
Rue 89, France: Prime Minister Shinzo Abe is a Threat to Democratic Japan
Japan Times, Japan: Osaka Mayor Refuses to Retract 'Comfort Women' Remarks
J-Cast, Japan: Why Further Humiliate 'Comfort Women' by Calling them 'Sex Slaves'?
Ryukyu Shimpo, Japan: Abe to Humiliate Okinawa with 'Restoration of Sovereignty Day'
J-Cast, Japan: Why Further Humiliate 'Comfort Women' by Calling them 'Sex Slaves'?
Hokkaido Shimbun, Japan: Shinzo Abe Must End Gamesmanship Over Post-War Constitution
Iwate Nippo, Japan: Imposed 66 Years Ago, Time Has Come to Revise 'Pacific Constitution'
Ryukyu Shimpo Shimbun, Japan: Okinawans Will Not be 'Pawned Away' to Curry U.S. Favor
Okinawa Times, Japan: Futenma Relocation Plan a 'Slap in the Face' to Okinawa People
Ryukyu Shimpo Shimbun, Japan: Battle of Okinawa Victims Deserve Better from Government
Okinawa Times, Japan: Okinawans will 'Spew Magma' Over Crimes of U.S. Forces
Global Times, China: Continued Dependence on America is Bad for Japan
Ibaraki Shimbun, Japan: After Osprey Deployment, Japan Government 'Cannot Be Trusted'
Chunichi Shimbun, Japan: On Okinawa Battle Anniversary, People Feel Abandoned
Ryukyu Shimpo, Japan: Okinawans ‘Unswervingly’ Against ‘Defective’ Osprey
Tokushima Shimbun, Japan: Okinawa Deserves Freedom from American Bases
Yomiuri Shimbun, Japan: Okinawa Governor 'Adament' About Osprey
Asahi Shimbun, Japan: Opposition to Osprey Deployment Grows
The Okinawa Times, Japan: It's Time to End Japan's 'Servitude to America'
Nishinippon Shimbun, Japan: It's Imperative for Japan to Look Outward Again
Nishinippon Shimbun, Japan: Revise ‘Inequitous’ U.S.-Japan Security Deal
Ryukyu Shimpo Shimbun, Japan: After Quake, Japan Can Ill Afford U.S. Base Repair
People's Daily, China: Australia Should Avoid Helping U.S. Hurt China's Interests
Australia: Aussie Coverage of Obama's Visit to Darwin; His Challenge to China
Isen Shimbun, Japan: Despite its Mistakes, Japan Needs U.S. More than Ever

 

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[Posted By Worldmeets.US, April 13, 2015,8:59am]

 

 

 

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