Are U.S. Allies Flocking to China’s New Bank?


In a surprise move, London announced Thursday that it will seek to join the Chinese-led Asian Infrastructure Investment Bank (AIIB), sparking an angry response from the U.S.

The (AIIB) was created by China last fall and officially rolled out with a signing ceremony in October 2014. At the original signing ceremony, 21 countries (including China) signed on to the $100 billion bank, designed to provide funding for infrastructure projects throughout the region. However, with the exception of India, most of China’s more influential neighbors abstained, including Australia, Indonesia, Japan, and South Korea. At the time, reports indicated that the U.S. government had heavily pressured these countries not to sign on.

However, AIIB has grown since its official founding. Indonesia, under new President Joko “Jokowi” Widodo, moved to join the bank in late November 2014. New Zealand signed up in January 2015, as did Saudi Arabia and Tajikistan. But London’s decision to join is truly groundbreaking, as the U.K. becomes the first European country – and the first major U.S. ally – to sign on the initiative.

On March 12, British Chancellor of the Exchequer George Osborne announced that the U.K. “intends to become a prospective founding member of the Asian Infrastructure Investment Bank,” becoming the “first major Western country” to join in. “Joining the AIIB at the founding stage will create an unrivaled opportunity for the U.K. and Asia to invest and grow together,” Osborne said.

Washington was not happy, to put it mildly. A senior official with the Obama administration told Financial Times that the decision highlighted London’s “trend toward constant accommodation of China.” The official also complained that the decision had been made with “virtually no consultation with the U.S.” U.K. officials denied that, telling The Guardian that Osborne had held discussions about the decision with his U.S. counterpart, Jack Lew.

The Diplomat

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