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Yasushi Tomiyama

【#532(Special)】Objection to Proposal for Japan and U.S. to Join AIIB

Yasushi Tomiyama / 2018.08.01 (Wed)

July 30, 2018

     In the present world, a camp of countries that share values emphasizing freedom, democracy, human rights, market economy and rule-based international order is confronting with another camp of authoritarian countries that have no such values. Japan, the United States, Australia and India form the core of the former camp. Nevertheless, leading research institutes of the four countries have made a stunning joint policy recommendations for Japan and the U.S. to join the Asia Infrastructure Investment Bank created at the initiative of China that represents the latter camp.
AIIB linked inseparably to Belt and Road Initiative
     The fundamental problem that we must remember with the AIIB is that the bank is inseparably linked to the Belt and Road Initiative, a modern Silk Road economic zone ambition advocated by Chinese President Xi Jinping who pursues the “great revival of the Chinese nation.” The BRI and AIIB are twin projects that President Xi proposed in 2013. The two projects have the same public objective of regional infrastructure building and development. The AIIB’s raison d'etre could even be said as realizing the BRI.
     In fact, the AIIB’s role in the BRI is limited for now. According to President Xi’s address to the Belt and Road Forum for International Cooperation in Beijing in May 2017, the AIIB’s loans to BRI participating countries were limited to $1.7 billion. Investment by China’s Silk Road Fund totaled $4 billion. BRI loans have been provided primarily by commercial banks as well as state-run banks known as policy banks undertaking China’s policy-based finance. According to the China Internet Information Center, a news site affiliated with the Chinse government, cumulative BRI loans at the end of 2016 totaled more than $160 billion for the China Development Bank and more than $100 billion for the Export-Import Bank of China. These policy banks’ BRI loans are far more than those from the AIIB.
     However, the BRI represents a giant project that is assumed to cost trillions of dollars. China alone should be fall short of providing such huge money. Given the creator and the objective of the AIIB that now comprises more than 80 countries against 67 countries for the Asian Development Bank, there is little doubt that the AIIB will play a role in promoting the BRI in the future.
China’s harbored ambition
     President Xi emphasizes that the BRI would bring about all participating countries’ “win-win” economic development. However, the C4ADS, a U.S. think tank also known as the Center for Advanced Defense Studies, exposed the realities of the BRI in a report titled “Harbored Ambition” in April, saying that Chinese port investments in the Indo-Pacific region have contributed to the generation of China’s political influence, the stealthy expansion of China’s military presence and the creation of an advantageous strategic environment for China.
     If so, the policy recommendations by the four research institutes for Japan and the U.S. to consider participation in the AIIB, reversing their refusal to join, would help an authoritarian China to achieve its hegemonic “ambition.” While showing their wariness against the BRI, the recommendations by Japan’s Sasakawa Peace Foundation, the Australian National University, India’s Vivekananda International Foundation and the Sasakawa Peace Foundation USA is seemingly careless about the strategic implications of the AIIB, I am afraid.

Yasushi Tomiyama is Senior Fellow and Planning Committee Member at the Japan Institute for National Fundamentals.