China not creating a new world order by launching AIIB

The International Monetary Fund (IMF) announced last year that China had overtaken the United States to become the world’s largest economy.

And with its success in establishing the Asian Infrastructure Investment Bank (AIIB), there is speculation that China is trying to create a new world order.

Indeed, China wants the existing world order to operate with fairer rules, so that no country would be unduly disadvantaged. But it has no desire or capacity to create a new world order.

China cooperates with the US, but insists that the superpower face the reality of the 21st century, and respect the sovereignty of rising countries and engage them on a level playing field.

But few understand why China wants to create a new Asian bank. The main thrust is to reduce poverty in the region: China wants to share its experiences to help other countries in this interconnected world to boost socio-economic development.

The prime mover for progress is good land, sea and air transport facilities. Hence, investing in infrastructural construction is a fundamental building block.

After years of hoping for reform in the IMF and the World Bank, China decided it was faster and easier to set up a rival. And Asia needs a lot of physical construction to improve, with an infrastructure funding gap that existing institutions cannot fill.

For tangible results, it is necessary to create another World Bank of sorts, free of political red tape and veto power.

Without good highways, rail networks, sea/air ports and logistics facilities, it is not possible to tap the global trading grid and attract international investments.

The world community should have faith in China’s peaceful rise. It has no military allies, bound by security treaties, though it is the leading trading partner in the world and has reliable friends such as Russia and Pakistan.

China will focus on its AIIB mission and domestic reforms while pursuing the Silk Road Economic Belt and the Maritime Silk Road to bring co-prosperity to countries.