China’s near-term economic outlook is being buoyed by policy support even as its medium-term prospects become more uncertain because of rapidly rising credit, excess industrial capacity and financial sector risks, the International Monetary Fund said.

China’s central bank Governor Zhou Xiaochuan said the government will make efforts to expand the use of the International Monetary Fund’s basket of reserve currencies in its domestic economy.

The International Monetary Fund on Monday is adding the Chinese yuan to the basket of elite currencies comprising its lending reserve, marking a milestone in the country’s ascendancy as a global economic power.

The key legal framework for the China-initiated regional multilateral institution – the Asian Infrastructure Investment Bank (AIIB) – was inked by representatives of the bank’s 57 founding members in Beijing last Monday. For China and the U.S., the AIIB is not about win-lose. A win-win result can be achieved if both sides are more open-minded.

SDR inclusion will mean an endorsement of the renminbi as an international reserve currency, and at the same time, the Chinese government will have the power and capacity to steer and manage the renminbi exchange rate.

AIIB is redefining global relationships in finance, in an attempt to break through the profit-driven nature of capital and meet more needs for infrastructure investment, writes Zhang Monan.

To some extent, the structures of the Asian Development Bank, World Bank, and International Monetary Fund are obsolete: they can no longer meet the needs of new emerging economies and don’t reflect today’s global economy. The AIIB could serve to invigorate the other banks to become more competitive and efficient.

Despite official American and Japanese opposition, 57 countries have opted to be among the founding members of the China-led Asian Infrastructure Investment Bank (AIIB). Regardless of what naysayers believe, this remarkable turn of events can only benefit global economic governance.

A more dynamic and flexible AIIB has the chance to develop and showcase strong, new and effective accountability mechanisms supported by all shareholders. Here though, China too must learn from and improve upon its own past practices if it is to prove the skeptics wrong.

The U.S. Congress’ inability to pass fair IMF reforms is partly responsible for China’s creation of the Asian Infrastructure Investment Bank (AIIB). While the U.S. is not at the center of this newly created institution. America still has time to develop the consensus in Congress to strike a balance between America’s leadership in the international system and the demand of others to have enough space, not only to survive in the system, but also to prosper.