China’s Infrastructure Bank: Can it Fly…

The past weeks have been filled with headlines on China’s year-old proposal for an Asian development bank, which has caught Asia’s imagination, especially with Indonesia signing on to the idea at the recent APEC meeting in Beijing. So far, 21 countries have embraced the plan in which China has pledged US$50 billion and said another US$50 billion might be forthcoming. But there needs to be some caution. While the AIIB has been welcomed by developing countries, the response from Japan and the US has been strongly opposed, suggesting that the Asia Infrastructure Investment Bank, as it has been dubbed, might find it necessary to divert some of its energy to managing geopolitics. The two countries have set out to keep Australia and South Korea from joining.

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