As a founding member of the AIIB and strong supporter of the Silk Road Fund, Cambodia stands to “greatly benefit…in terms of infrastructure investment needs”. The two funds intend to pursue funding of regional infrastructure developments in line with China’s One Road, One belt policy.
China defends veracity of foreign exchange reserves data
As China devalues its currency, investors voice concerns over whether China has enough liquid resources in their foreign reserve to support the renminbi. China reassured that only liquid resources that can easily be used in currency markets were accounted for in the foreign exchange reserves. Still there have been concerns over whether the Chinese contributions made to the AIIB and the BRICS bank have been deducted.
China's 5 Part Plan to Combat the Economic Slowdown
China's growth over the past decade has been largely due to the export of raw materials. With a slowing global economy, demand for raw materials has also slowed, putting China's economy in a dangerous place. The Chinese Government have a five part plan to jump start the Chinese economy and protect their assets with a growing military.
1. Increase Chinese involvement in Free Trade Agreements.
2. Continue geo-economic outreach with One Belt, One Road.
3. Invest in Africa and Latin America and redirect China's domestic overcapacity.
4. Fund infrastructure initiatives via the AIIB and Silk Road Infrastructure Fund.
5. Build military capacity and counter the US "Pivot to Asia" strategy.
AIIB will Increase Global Prosperity and Stability
China's policies aimed at increasing its economic presence throughout the region is not new. The current initiatives, including AIIB and One Belt, One Road are based on the Peaceful Development framework developed by the Chinese Communist Party in the 1990's. That framework proposes that the success of international partners, especially partners in developing countries, will contribute to economic success China. The Peaceful Development framework and current Chinese initiatives, such as the AIIB, are forces for increased global prosperity and stability.
AIIB will Provide Platform for South Asia to Thrive
Despite being geographically and culturally close, South Asia lacks economic cooperation. The lack of roads and other basic infrastructure in the region played a large part in this issue. The AIIB will be the thread that ties the nations of South Asia together by increasing their ability to facilitate trade.
The AIIB Attracts additional Financial Partners to Further its Goals
Sir Suma Chakrabarti, president of the London-based European Bank of Reconstruction and Development (EBRD) claims he is keen to work with the new Asian Infrastructure Investment Bank. The infrastructure needs in Asia he says, are enormous. In 2009 the Asian Development Bank estimated 8 trillion in spending is needed over the next 10 years and Asian nations cannot fund the cost alone. The EBRD, as part of their new focus on the region, will finance at least two projects in Central Asia this year with the AIIB.
Can China set a New Pace with the AIIB?
During an interview with Wharton College, John Lee comments on the future of Chinese funding for their Asian Infrastructure Investment Bank. Lee claims the AIIB will definitely go forward but it will not be a game changer in the region like China thinks. One reason is the funding for AIIB is to come from China's foreign exchange reserves which has gone down by something like 800 billion over the last year to support its currency. The biggest problem Lee foresees, however, is that a lot of countries have suspicions about China's political motivations for allowing billions of dollars of capital into their countries. Countries will still want Chinese money, they will be very wary of the consequences. The bottom line is compared to the infrastructure needs of the region AIIB is only a drop in the bucket.
Italy's Dialogue Concerning China's Development Initiatives
The Global Conference of the Bocconi Alumni Association was held in Shanghai on March 11th. At the conference Italy's Italian Undersecretary of State for Foreign Affairs Benedetto Della Vedova declared Italy is dedicated to becoming a larger part of China's Belt and Road initiative. Vedova claims Italy sees huge potential in the Silk Road initiative and plans to increase person to person connections with China to offer added value through the AIIB.
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