China’s creation of the Asian Infrastructure Investment Bank and the bungled U.S. response have given Beijing a nice diplomatic win. Not hugely consequential in itself, the episode is a case study in how not to deal with the world’s biggest emerging power. Before it happens again, the U.S. and its friends ought to pause and reflect.
China’s Pain Points
China has two goals in building this new international lender. First, it wants an additional conduit for its surplus of savings — a way to lend abroad that deflects resistance from borrowers worried about being under China’s thumb. (Lately, Chinese-led construction projects have prompted protests from Sri Lanka to Zambia.) Second, China’s rulers crave the respect of other nations and seek the global standing they believe should come with their growing economic strength.
Neither goal is unreasonable. Neither needs to be resisted by the West as a strategic imperative — and there’d be little prospect of long-term success in that effort anyway. The worst thing, though, is to oppose China’s plans and then fail, especially in a way that divides the West against itself. That is what just happened.
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