US ‘miscalculated’ on Asian Infrastructure Investment Bank: Albright

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Source: China Daily

Former Secretary of State Madeleine Albright talked about the US-China relations at the Center for Strategic & International Studies on Tuesday in Washington. Dong Leshuo/China Daily

“I think maybe the bottom line is we screwed it up,” former US Secretary of State Madeleine Albright said Tuesday about the United States’ decision to not seek membership in the Asian Infrastructure Investment Bank (AIIB).

“I think we miscalculated, in terms of that other countries also want to be part of the Chinese initiative,” she said. “All of a sudden everybody was in.”

Forty-six countries had joined or applied to become founding members of the China-led bank by Tuesday’s deadline, including some key US allies such as Great Britain, France, Germany and Italy.

Albright, who runs the Albright Stonebridge Group, spoke at the Center for Strategic and International Studies in Washington. The center also presented the findings of a two-year study of China’s economic decision-making, which was geared toward helping inform US strategy.

The study argues that China’s economic trajectory in coming years will have a substantial impact on the prospects for US and global growth, as well as on broader American interests in the Asia-Pacific region and the world.

Albright agreed that there have been questions from China and other countries that “the US has been too dominant in the World Bank. There has been a certain amount of frustration about that.

“I would hope we could recapture some kind of cooperation here,” Albright said, suggesting that the US should look for ways for the AIIB and the World Bank to cooperate.”

In San Francisco, US Treasury Secretary Jack Lew, who returned Tuesday from a trip to China, said in reference to the AIIB that the US “welcomes new additions to the international development architecture”.

In an address to about 100 executives of Silicon Valley-based companies and businesses who attended the meeting held by the Asia Society, he said China need to “maintain and advance high standards in institutions” as the two countries “work together to address the challenges of the 21st century”.

“I returned today from meetings in Beijing, where I had frank and constructive conversations with Chinese leaders about the state of our two economies and the bilateral issues we face,” said Lew, who met Premier Li Keqiang in Beijing on Monday.

Kenneth G. Lieberthal, senior fellow of foreign policy studies at Brookings Institution, said the AIIB “really represents a new model”.

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  1. World Bank, IMF: will work with AIIB
    The World Bank and the International Monetary Fund (IMF) are ready to cooperate with China and the Asian Infrastructure Investment Bank (AIIB), the World Bank Group president and the head of the IMF said on Thursday.
    “Our expectation is that we will continue to have a very close relationship and that we will work with China to tackle their most complex and difficult issue,” said Jim Yong Kim, World Bank Group president. He spoke at the World Bank/IMF Spring Meetings 2015 opening press conference.
    “I first of all want to congratulate China for taking such a bold step in the direction of multilateralism,” Kim said.
    Kim stated that in recent years, the collaboration between China and the World Bank Group “has only gotten stronger”. They have had close communication with Chinese officials since the beginning of the foundation of the AIIB.
    “I suspect that in the early period we’ll play a much larger role in project preparation because we have much more technical expertise than the AIIB has right now,” Kim said. “But there’s no reason why we would not do a lot of the project preparation, for example, through our global infrastructure facility, and then AIIB could be a co-investor.”
    Kim said last week that the World Bank welcomed the AIIB in advance of the spring meetings.
    The World Bank Group is waiting for a point at which there are articles of agreement or a constitution for AIIB framing specific areas in which the AIIB will invest, to continue the conversation between both sides, Kim said.
    The China-led AIIB’s prospective founders’ list increased to 57 countries as of Wednesday. The latest founding members are Sweden, Israel, South Africa, Azerbaijan, Iceland, Portugal and Poland, according to the Ministry of Finance.
    The IMF also expressed that it is prepared to collaborate with AIIB.
    “That (AIIB) is a most welcomed institution and one with which the IMF certainly is planning to cooperate with,” said Christine Lagarde, the managing director of IMF.
    “The proposal to have a completely dedicated institution [AIIB] that will focus on infrastructure on a regional basis is actually an attractive proposition, and it’s not that the region is short of needs; it’s short of potential projects,” she added.
    Lagarde signaled her stance to support the AIIB at the Atlantic Council on April 9, ahead of the annual meetings in Washington, saying cooperation with the AIIB “is a no-brainer”.
    The World Bank Group highlighted the importance of undertaking “comprehensive structural reform programs” in developing countries to promote growth, in line with the IMF World Economic Outlook April 2015, released on Tuesday.
    Kim also dismissed concerns the rise of shadow banking in China remains a high risk, saying that “our own sense going forward is that the Chinese authorities are very well-equipped to deal with whatever might happen, and we don’t think that the risk of a disorderly unwinding or a disorderly event related to the current sub-national indebtedness (in China) or the shadow banks is a high possibility”.
    Asked about the inclusion of China’s yuan in the special drawing rights (SDRs) currency basket, an international reserve asset, Lagarde said that yuan is on its path to meet IMF criteria by speeding up the opening of capital accounts and deepening financial markets.
    “The Chinese authorities know quite well what is desirable, what needs to be changed and improved in the monetary policy and in the financial sector in China,” Lagarde said.
    Chinese Premier Li Keqiang said earlier that China would speed up convertibility of yuan at meeting with Lagarde in Beijing on March 23. He urged the IMF to include the yuan in the SDR basket, hoping that China could play an active role internationally in maintaining financial stability through the SDR.

    http://usa.chinadaily.com.cn/world/2015-04/17/content_20457547.htm

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