West\\\'s interest in AIIB shows economic shift, says ICCB

FE Desk | Published: May 11, 2015 00:00:00 | Updated: November 30, 2026 06:01:00

China's strategy for competing with the U.S. in global finance and investment seems both prudent and shrewd, the International Chamber said.
In its editorial of the current ICCB News Bulletin, released Sunday, the International Chamber of Commerce-Bangladesh said China has put together sizable bilateral aid packages for strategic allies and resource-rich developing countries designed to strengthen its economic ties.
"The latest manifestation of China on this front is the US$20billion and US$46 billion energy and infrastructure deal announced for Bangladesh and Pakistan respectively," the editorial said.
Meanwhile, the chamber said US President Barak Obama's proposed Trans Pacific Partnership (TPP) is at the final stage of negotiations and appears to be just around the corner.
TPP would be the largest trade deal in American history, involving the U.S., Japan and 10 other countries, excluding China and India that combined together make up 40 per cent of the world economy.
President Obama has made the proposed trade deal the centerpiece of his foreign policy in East Asia, where China is challenging America's long-held dominant influence in the region.
The editorial argued that Obama's legacy as the self-proclaimed Pacific president hinges on nailing down the TPP.
With the TPP, the U.S. wants to reduce tariffs and other barriers to open markets as well as establish standards on a range of issues affecting trade and commerce, such as intellectual property rights, government procurement and state-owned enterprises.
The White House has estimated that the trade deal would boost American exports by $123.5 billion a year by 2025.
"The future relationship between China and the United States is one of the mega-changes and mega-challenges of our age. China's rise is the geopolitical equivalent of the melting polar ice caps: gradual change on a massive scale that can suddenly lead to dramatic turns of events," said the ICC-B editorial.
China has overtaken the US to become the world's largest economy, according to IMF, using purchasing power parity (PPPs). The Monetary Fund now estimates China's GDP at $17.6t, against the US's $17.4t. In 1980, the country's economic output was a tenth of the US which is now estimated that China's economy will soon be 20 per cent larger than the US.
According to the chamber, the shift in economic power also comes inevitably with a shift in political power.
"This spectacular evidence in recent times is being seen with the last-minute stampede of political support from Western governments around the world to become founding members of China's proposed Asian Infrastructure Investment Bank (AIIB), in defiance of Washington's objections," noted the editorial.
Earlier China had formed financial institutions that directly compete against those founded and dominated by the U.S. In the last two years, China has set up the US$50 billion Shanghai-based New Development Bank (NDB), US$40-billion New Silk Road Fund and a US$100 billion liquidity reserve.