Implication of the Asian Infrastructure Investment Bank for Global Financial Governance: Accommodation or Confrontation?

• Author: Li Tao and Jiang Zuoli
• Pages: 140-150

140 TSINGHUA CHINA LAW REVIEW [Vol. 9:139

IMPLICATION OF THE ASIAN INFRASTRUCTURE

INVESTMENT BANK FOR GLOBAL FINANCIAL

GOVERNANCE: ACCOMMODATION OR CONFRONTATION?

LI Tao

JIANG Zuoli

Abstract

The creation of the China-led AIIB has been the most important

event in the international financial sphere in recent years, but the

comments about it have often been made from a multitude of lenses,

thus complicating the recognition of its real implication. By

clarifying the inclinations reflected in the AIIB issue and reviewing

the problems with the global financial governa nce system, this

article argues that the AIIB is not so m uch an extension of Chinese

influence as a reaction to the demand of transforming this system.

This article concludes that the AIIB is an accommodation, rather

than confrontation, to the global financial governan ce system.

I. INTRODUCTION

The establishment of the Asian Infrastructure Investment Bank

(AIIB) is one of the most eye-catching events in the international

financial sphere in recent years. It must be noted, however, that in its

early founding stage the AIIB did not garner considerable attention.

Only after Britain declared to join the AIIB as a prospective

founding member (PFM) in defiance of the dissuasion by the United

States, which induced more European developed countries to

follow,1 the AIIB became a hotspot throughout the world, giving

rise to various opinions. Some experts think of the AIIB as a

landmark event signaling China’s challenge to the current global

multilateral order;2 whereas many others find that the AIIB is just a

“pilot project rather than a dominant new model,” which bears no

extension of Chinese influence.3 Now the AIIB has been operational

for months, and the debate about it seems to have faded as the U.S.

!!!!1 Anne-Sylvaine Chassany et al., Europeans Defy US to Join China-led Development Bank,

FINANCIAL TIMES, Mar. 17, 2015, at 01.

2 Should Washington Fear AIIB? Foreign Affairs’ Brain Trust Weighs In, FOREIGN AFFAIRS (Jun.

11, 2015), https://www.foreignaffairs.com/articles/china/2015-06-11/should-washington-fear-aiib. This

magazine conducted a survey about experts’ opinion on the statement that AIIB represents the start of a

fundamental challenge to the current global multilateral order. The results show that among 33

feedbacks, 2 strongly agree, and 9 agree.

3 China Plays Ball with Its Development Lending, FT.NET (Mar. 23, 2016), https://www.ft.com/

content/1211215e- f02b-11e5-aff5-19b4e253664a.