Is China a Challenger? The Predicament of China’s Reformist Initiatives in the Asian Infrastructure Investment Bank

This paper assesses whether the establishment of the Asian Infrastructure Investment Bank (AIIB) signals China's reformist intention in the area of international development. I use both descriptive and inferential statistics to compare power distribution in the World Bank, the Asian Development Bank (ADB), and the AIIB, and the composition of the AIIB membership. Evidence shows that there is no obvious structural difference in voting power among the three banks. The major difference between them is that China is the most powerful state in the AIIB. For the time being at least, the AIIB does not signal Beijing's intention to reform the current system. Instead the bank seems to be an instrument that China can use to compete with established international financial institutions. However, Beijing may be faced with several challenges.

First, dissatisfied members of the World Bank will not find a remedy for that organization's shortcomings in the AIIB. The problem of unequal representation structure remains. Second, the AIIB is unlikely to facilitate the formation of a China-led alliance, nor is it likely to adopt global best practice due to the disparity of interests among its members. Third, Washington and Tokyo are probably right to refuse to join the AIIB and to devote more attention to strengthening the World Bank and the ADB instead. Greater competition among the three is likely to reduce the AIIB's influence. To sum up, it is difficult to detect any reformist intention behind the AIIB, and it is still too weak an organization to facilitate the formation of a strong alliance by means of which China can carry out its international agenda.

Keyword: AIIB, World Bank, Asian Development Bank, voting power, revisionism, China

Author: Ian Tsung-yen Chen

Status: Published in Mainland China Studies (中國大陸研究)

History: This paper was presented at the 44th Taiwan-American Conference on Contemporary China, Taipei, 2015.

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