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WEEKLY DIGEST: March 21-27, 2016

3/29/2016

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The AIIB and ADB Begin a Cooperative Relationship 

Washington has doubted how effective and collaborative the AIIB would be. These doubts can begin to be eased this week, as the AIIB is working with the Japanese led development bank, the ADB. The AIIB and the ADB are undertaking a joint loan, which could be the first of many efforts the AIIB will make to engage in international cooperation.


China's Improving Relations with Vietnam, Myanmar

Chinese Premier Li Keqiang committed 11.5 billion dollars to development projects in South East Asia and stated he would encourage the Silk Road Fund and the AIIB to also commit to funding development in the region. One of Li's goals is to increase the use of the yuan in Laos, Myanmar, Thailand, Cambodia, and Vietnam. This could be a step in improving the tense relationship between China and Vietnam and Myanmar. 


The AIIB and EDB Collaborate to Connect Europe and China with Road 


The AIIB is teaming up with the Eurasian Development Bank (EDB) to finance the construction of a motorway across Russia, linking China and Europe. This projects is expected to cost billions of dollars and involve Russian cooperation. 


Growing Waitlist for AIIB Membership

President of the AIIB, Jin Liqun states that there are currently more than 30 countries waiting to join the Asian Infrastructure Investment Bank (AIIB), in addition to its 57 founding members. At the Boao Forum for Asia on the Chinese island province of Hainan, President Jin said that the bank is  working to solve the member state waitlist issue  by the end of the year. The bank chief also noted that it is possible for China's Hong Kong Special Administrative Region to become a member as a sub-sovereign government, based on the bank's articles of agreement.


The AIIB Looks to Extend Membership to Hong Kong

AIIB president Jin Liqun claimed that Hong Kong may join the Beijing-led Asian Infrastructure Investment Bank as a sub-sovereign member by the end of the year 
at the Boao Forum for Asia on Friday. Jin believes Hong Kong is an international financial center that has a huge role to play in facilitating financing the AIIB. Christopher Cheung Wah-fung, a lawmaker for the Hong Kong's financial services sector said lender status in the AIIB would upgrade the status of Hong Kong's financial sector in the international world. If the AIIB chooses to use the Hong Kong platform to issue bonds or other products to raise funds, it would attract more international firms to set up shop here while the city’s investment banks would also expand their businesses here.


AIIB President Once Again Welcomes and Encourages U.S. Participation

At a pannel at the Boao Forum for Asia on the southern island of Hainan, AIIB President Jin Liquin said the AIIB would welcome the US as a member. Even if the US does not become a member, there are already a number of seasoned professionals with American passports working at the AIIB. However, Jin did caution that competition against Chinese companies bidding for work on AIIB funded projects would be extremely high. In 2014, President Obama stated that the U.S. would not be opposed to participating with the AIIB. President Xi Jinping further welcomed U.S. involvement with the bank that same year.


The BRICS Bank Seeks to Work Closely with the AIIB

The BRICS-backed New Development Bank will soon issue between 3 billion yuan and 4 billion yuan in bonds in China. This sum comes from the five emerging economies behind the bank: Brazil, China, India, Russia and South Africa. The bonds will mostly be related to green energy and clean energy. Although the economies of these 5 nations are diverging, BRICS bank the vice-president, Leslie Maasdorp, said the bank had a “20-year horizon” and there is no pressure from shareholders to see immediate dividends. What sets the BRICS bank apart from the structure of the China-led Asian Infrastructure Investment Bank is that each of the five countries holds 20 percent of the voting rights. Massdorp claims BRICS will not compete with the AIIB because they have a different geographic focus, however, the two banks will still work together closely. The BRICS has important operational issues to address first and foremost before anything else. The bank is in talks with two international rating agencies and is undergoing rigorous due diligence to secure an international rating, however, this might be a hard story to tell as Brazil and Russia both have junk ratings and South Africa and China might be facing downgrades.


"Asia Development Bank open to joint lending with China-led AIIB" - Nikkei Asian Review


The President of the Asian Development Bank, Takehiko Nakao, indicated that the ADB would be open to jointly working with the AIIB. Nakao noted that the European Bank for Reconstruction & Development and the World Bank are interested in collaboration, as well. Nakao also noted that the ADB will works towards “increasing capitalization” and investments from emerging economies. Nakao lastly asserted that the ADB could specifically help increase the AIIB’s international connectivity and platforms of environmental protection.


"Chinese and Japanese development banks to offer joint loan" 
- Out-Law.com

Asian Development Bank President, Takehiko Nakao has confirmed that the ADB and AIIB will offer joint loans. Nakao also noted that the two banks will assure that the loans safeguard “environmental, labour, and anti-corruption” standards. The cooperation is considered positive, as some analysts assert that it will give AIIB credibility if loans cofinanced with ADB, an experienced multilateral bank. Others stress that the 2 banks will selectively cooperate, as the two banks pursue different objectives. For instance, some analysts note that the AIIB will focus on economic infrastructure, whereas the ADB focuses on projects concerning “social inclusion and environmental sustainability.” While Japan leads the ADB, the country is not a member of AIIB. Japanese Prime Minister, Shinzo Abe, has previously noted that the ADB will remain competitive by soon halving their lending time. This effectually ends the bank’s “practice of requiring government guarantees for each loan.” Similarly, Abe remarked that Japan plans to provide $110 billion to Asian infrastructure development over the next five years.


​"S. Korea calls for strong leadership to boost growth in Asia" 
- Yonhap News Agency

South Korea Finance Minister, Yoo Il-hoo, has remarked that the Asian region needs “strong leadership to rejuvenate economic growth.” In statements issued Thursday, Yoo noted that Asia is at a “crossroads between growth and stagnation.” Yoo asserted that the AIIB is crucial in funding infrastructure for developing nations. Yoo emphasized that funding the Asian infrastructure gap is a significant stimulant for financial growth.


"China mulling designated name for Taiwan to join AIIB: official" - Taiwan News

Beijing and Taiwan are currently negotiating the title under which Taiwan might join the China-led AIIB. In order to proceed in negotiations, representatives of both countries assert that Taiwan must first enact a bill that would allow “stricter screenings of agreements with China.” Due to its opposition to Beijing, Taiwan often confronts difficulty joining international organizations like AIIB and World Bank. China, however, maintains that Taiwan is welcome to become a member country of the bank.


"Pushing back against Beijing’s colonisation of the sea" - The Nation, Rene L Pattiradjawane

Pattiradjawane reports on ASEAN member nations’ frustration with Chinese colonization of the South China Sea. Member countries assert that China’s actions defy international law and agreements, as it continues to construct artificial islands in Asian waters. Pattiradjawane explains that there are 2 main motives for Chinese expansion. First, expansion is likened to “maritime colonialism,” as it ignores regional cooperation in the sea-lanes. Second, China has used the islands in order to increase its “physical security,” as they would block external threats by sea. Furthermore, Pattiradjawane asserts that China projects its domination in the region through “a mix of military, political, and cultural forces.” Pattiradjawane cites the China-led AIIB as an example of China’s continual emergence into global world orders. Pattiradjawane concludes by advising that Southeast Asian countries pursue “concrete political gestures” in order to resolve maritime conflicts.  


"China Hosts Regional Meeting, Announces $11.5 Billion Loan to Neighbors" - China Topic
​

Leaders from China, Thailand, Cambodia, Vietnam, Myanmar, and Laos met to discuss the first Lancang-Mekong Cooperation Meeting. During the meeting, China offered $11.5 billion in loans and $10 billion in credit for Southeast Asian countries to pursue “infrastructure and other projects.” Remarking on the meeting, the Chinese Premier asserted that he would “make efforts to persuade China’s AIIB and ‘Silk Road Fund’ to finance projects in the peninsular region.” Javed lastly noted that despite disputes over China’s territorial claims in the South China Sea, China has pledged friendships to nations Myanmar and Vietnam.
 


Check back with our blog next week for another weekly update.

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WEEKLY DIGEST: March 14-20, 2016

3/23/2016

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IMF Chief Hopes BRICS Bank, AIIB Will Cooperate

IMF Chief Christine Lagarde expressed hope that the AIIB and BRICS bank are willing to cooperate to better mobilize resources that will address the large demand for infrastructure investment in the region.

China's Regional Commitments Un-phased by Slowdown at Home 


Despite the economic slowdown at home, China continues to invest in regional development through the One Belt One Road initiative. Additionally, China's first multilateral financial institution, the AIIB, will begin project implementation this year. The success of these projects will serve as proof of China's increasing global leadership in financial investment. 


US Should Share Burden of Global Security with Rising Powers

As the U.S. declines in power, it is important that Washington begins to recognize the legitimacy of rising powers, such as Russia and China. China's Silk Road Fund and the AIIB have the potential to increase Eurasia's economic standing. More cooperation is needed between the US and these rising powers to reduce conflict and terrorism in Eurasia and increase economic stability.


China to create maritime judicial center
China has made a move to establish its own maritime judicial with the purpose of handling its longstanding maritime disputes with other countries. This comes as a result of China’s dissatisfaction with the international status quo, which China has also recently challenged in the realm of international finance with the founding of the Asian Infrastructure Investment Bank (AIIB).


Risks to China’s grand strategy in Southeast Asia
China’s recent ramping up of efforts in developing extensive and valuable trade corridors could be met with some resistance and complications. Political uncertainties in Southeast Asia could create barriers to investment due to disputes over sovereignty in maritime affairs, lack of continuity of government or policy in Southeast Asian countries, and security concerns regarding terrorism.




Check back with our blog next week for another weekly update.

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WEEKLY DIGEST: March 7-13, 2016

3/15/2016

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Cambodian PM reiterates support for China-initiated AIIB, Silk Road Fund

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
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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.




Check back with our blog next Tuesday for another weekly update.

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WEEKLY DIGEST: February 28-March 6, 2016

3/8/2016

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 Vietnam Needs Transport Overhaul

Vietnam’s 2035 growth targets are ambitious, but underlying issues with current infrastructure cause a hindrance that may result in economic inefficiencies and slow down. With anticipated infrastructure investment needs totaling tens of billions of dollars annually, Vietnam stands to benefit from being a signatory nation to the AIIB.

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Reviving the Silk Route via One Belt, One Road


Under the One Belt, One Road policy China currently has about 900 projects valued at $890 billion outstanding. This large investment in foreign infrastructure is part of a greater goal to develop an extensive international trading apparatus that can provide greater economic integration for isolated regions and open new markets for delivery of Chinese products. China’s large investment in foreign infrastructure is bolstered by the newly launched AIIB.


What China's Scaling Up of Global Finance Really Means

As of late China has been more involved in acquiring favorable positions in global financial institutions and spearheading launches of their own multilateral institutions for investment (the AIIB and BRICS Bank). While some may view this as a challenge to the status quo maintained the IMF and World Bank, it can also be argued that China’s recent behavior poses no threat and does not crowd out other institutions due to the large size of the infrastructure gap in developing countries.


Asian Century
​

China and India were lauded to be the future drivers of the new international order of that would be known as the “Asian Century”. While China (and to some extent India) has experienced significant economic growth in the past three decades, gained recognition for the yuan by the IMF started multi-lateral organizations like the AIIB, there has yet been a moment in which China had truly made a game-changing move to influence the international order of things.


AIIB Collaborating with Danish Government and Private Sector 


AIIB President, Jin Liqun, visited Kristian Jensen, the foreign minister of Denmark today. Jensen stated that the AIIB will increase trade between Asian and the rest of the world and create sustainable economic growth in Asia. The AIIB President will also be meeting with private sector companies in Denmark to discuss opportunities for collaboration. Denmark is one of AIIB's 30 founding members. Officials at the AIIB expect to reach 57 founding members in total. 


China to serve as world unifier and innovator through development projects

Former French Prime Minister, Jean-Pierre Raffarin, expects China to emerge as a world leader due to its heavy investment in multi-national projects. According to Raffarin, there is a global push towards multilateral international cooperation, as evidenced by the engagement of over seventy countries in the Asian Infrastructure Investment Bank (AIIB). As the growth of multi-national investment continues, China is apt to remain “one of the main engines of the world economy.”



China to rise through multi-national investment, not soft-power strategy

Though the exportability of Chinese culture is not very high, China’s favorability is steadily rising in African, Latin American and Middle Asian countries due to increased Chinese investment across the globe. Though Chinese soft-power pales in comparison to that of the US and Europe, China is making significant progress towards global leadership by taking on multi-national economic projects. The BRICS bank and the Asian Infrastructure Investment Bank are set to compete with the US led World Bank by offering country specific economic investment approaches. This new Chinese investment style may eclipse the more traditional IMF and World Bank style of investment.



Will the AIIB Go Against the Grain for Better or For Worse?

Though the Asian Infrastructure Investment bank (AIIB) is touted as the anti-World Bank and anti-IMF organization, the AIIB actually conforms to the traditional global financial system. Because the AIIB funds are fully reserved for infrastructure development, the AIIB simply fills the infrastructure investment gap that is not covered by the World Bank and IMF. In addition, the Asian Development Bank already provides economic development in the region, so many observers question China’s political and economic motivations for the creation of the AIIB in the first place.


The Case for US Membership in the AIIB


US involvement in the AIIB would create external pressure that would help prevent Chinese over-influence on the AIIB. Further, the US membership in the AIIB would secure US influence in the Asian region. Founding member countries have already used their position to revise the AIIB's Articles of Agreement and have brought international standards to the inner workings of the AIIB. 


Seoul's Warming Relationship with Beijing Could Go Cold 

South Korea's talks with the US regarding a missile shield test in South Korea has disrupted the increasingly positive relations between Seoul and Beijing. Last year, South Korea became a founding member of the AIIB and signed an additional trade agreement with China. Part of the motivation for increasingly the strength of Seoul's relationship with Beijing was to gain influence over Chinese policy toward North Korea. China is the primary supplier of goods to Pyongyang, North Korea's capital. 


"Overseas views on NPC & CPPCC: How Malaysia scholar sees the Belt & Road initiative?" 
​

Doctoral researcher in security foresight at the University Technology Malaysia (UTM), Mathew Maavak, argues that China’s New Silk Road Initiative will succeed, as it facilitates trade and development for third world countries in ways that the western world cannot. Maavak asserts that there is an “unequivocal demand” for AIIB-funded projects. He stresses that AIIB loans lack the political strings that are attached to western loans, and that AIIB loans will be granted and repaid in manners, which benefit the individual countries accepting them. Maavak argues that the AIIB can construct these individualist financial arrangements. For example, Maavak explains that AIIB may choose to utilize combinations of public-private loan agreements in certain instances. Maavak lastly cautions that countries participating in the Silk Road may risk “political fallout” with western institutions and an inability to make loan payments, as the Asian economy slows.


"EU may struggle for balance in ties with China" 

Article author, Manabu Morimoto. cautions that the European Union may struggle to balance its political relations with China. While many EU nations recently joined the China-led AIIB, the region must also deal with China’s trends of excess production in the steel and industrial sectors. Morimoto stresses that Chinese overproduction, paired with an Asian economic downturn, has consequently “dragged European industry into a crisis.” As the EU is the world’s second largest regional steel producer, Chinese overproduction has hampered European job prospects and could potentially collapse the EU’s steel sector. Member countries have pressured the EU to work with Beijing on reducing excess steel production, but many assert that this has been ineffective, and conclude that the EU is fearful of weakening new relationships with China.  


"How a Trump Presidency Would Undermine America's Foreign Policy"

In this opinion piece, author Marc Barnett asserts that foreign policy under Donald Trump would hamper U.S. relations with Europe, Iran, and China. Emphasizing that the U.S. and Europe must remain close in dealing with transatlantic security issues, such as ISIS, Barnett cautions that already-strained relationships between the U.S. and the E.U. could become weaker under Trump’s “isolationist” policy proposals. Barnett also postulates that Trump threatens to derail progress made in the Joint Comprehensive Plan of Action on Iranian nuclear weaponry. Barnett hypothesizes that a Trump presidency would disturb recent trends toward political moderateness in Iran. Lastly, Barnett stresses that “Mr. Trump and his bombastic rhetoric” could push emerging markets, such as China, into developing “rival organizations that threaten the US’ strategic position in Asia.”  While Barnett writes that the U.S. should support China's integration into international markets, he cautions that a Trump presidency would lack “effective diplomacy.”


"Overseas construction orders boosted" 

The Korean government will spend $2 billion to support companies in their bids for overseas construction. Author Yoon Ja-youn asserts that due to low oil prices, countries have cut construction orders, and consequently, Korea hopes to work with institutions like the AIIB to win bids for jobs. Yoon Ja-youn also explains that Korea will seek construction opportunities in Iran, where sanctions have recently been lifted, and where railways and water resources lack development. The article concludes by noting that Korea represents a 3.81% stake in AIIB, and that the ratio of Korean employees in the Chinese bank should resemble a similar percentage. Yoon Ja-youn explains that this would help to bridge opportunities between Korean construction companies and AIIB projects.


"China set to win trust, confidence of other member countries: AIIB President"

In a recent lecture at the Copenhagen Business School, AIIB president Jin Liqun stressed that the bank “is not a tool of the Chinese government.” He maintains that the bank is a truly international financial institution and that he hopes the AIIB will “initiate an international best practice.” Jin continued to assert that while the bank is identifiable as an MDB, or multilateral development bank, it should be classified as a new kind of bank. He cites several main principles of the bank; namely, that it “foster sustainable economic development” and “create wealth and improve infrastructure connectivity in Asia.” Jin also noted that the bank will increase connectivity across Eurasian lands, and thereby lower the costs associated with business between Asian and European countries.


Azerbaijan finalizes AIIB membership

Azerbaijan's members of parliament ratified the agreement on the articles of the Charter of the Asian Infrastructure Investment Bank (AIIB). Azerbaijan's installments membership fee is 245.1 million and will be paid in five equal installments.

​
Other interesting summaries this week....


​"Making Good on the Rebalance to Asia"


The United States’ attention to the Asia-Pacific during the Obama presidency has dramatically increased, especially with regard to China. The Obama presidency however, has not seen a new forward looking strategy for the Asia - Pacific. Instead the United States has sought to maintain elements of the status quo. Over the past seven years, Washington and Beijing cultivated a thick web of bureaucratic contacts centered around US - China Economic dialogue.

The U.S.'s so called rebalance to Asia, however, has lacked a clearly communicated purpose. The United States wants to defend the status quo under which the United States enjoyed military preeminence and favorable economic arrangements. This defense of the status quo, however fails to meet the challenges of China's increased capabilities and influence. For one thing, the Obama administration failed to undermine the establishment of the Chinese led Asian Infrastructure Investment Bank by highlighting concerns that the AIIB would not meet environmental and labor standards. Yet many of the countries the US tried to convince to stay away from the AIIB became founding members, such as the United Kingdom.

​Ultimately, with respect to the U.S.-Chinese relationship, this defense of the status quo does not comport with the fact that the power dynamics between the two countries have already changed. It is time for the Obama administration to take a more proactive approach in the changing Asian - Pacific geopolitical landscape.



"The Global Economy’s Stealth Resilience"

Last week, Christine Lagarde, the International Monetary Fund’s managing director, warned that if countries do not act together, the global economy could be derailed. Yet at the recent G-20 meeting in Shanghai the finance ministers to whom these entries were directed, failed to make an agreement. However, their failure may have reinforced a shift to a new phase of distributed global governance. The key factor in this context has been widespread recognition of the risks inherent in economic globalization, and concerted efforts to build up the needed resilience on a national, bilateral, or regional basis.

Countries benefit from greater access to more diversified sources of finance. Some emerging and developing countries now access global bond markets individually. And the role of regional development banks – including the African, Asian, and Inter-American Development Banks, as well as the newly created Asian Infrastructure Investment Bank and the New Development Bank – has grown.


These regional institutions however, will not eliminate the need for traditional multilateral institutions. Bodies like the IMF, the World Bank, and the World Trade Organization should be responsible for analyzing and transmitting vital information to the array of institutions that are filling their traditional role.





Check back with our blog next Tuesday for another weekly update.

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WEEKLY DIGEST: February 21-27, 2016

3/1/2016

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​Is there trouble on the horizon for the U.S. due to China’s footing in the Asia-Pacific region?
 
The article uses the recently found Chinese missiles in the Paracel Islands as the backdrop for a larger discussion on US-China relations and geopolitical tensions. The article questions the U.S.'s ability to assert itself geopolitically and pointed to its inability to prevent its allies from joining the AIIB and the growing irrelevance of the G7.
 
 
India reaches out to Australia for additional support
 
The article covers the proposed visit of the Indian Finance Minister to Australia and the possible agenda. India requires significant investment to further develop and build its economic base. India is looking to Australia and the latter’s super funds in hopes that it might help in this endeavor, especially as the Chinese economy starts to face strong headwinds.
 
 
China's three-pronged strategy
 
The article covers China's three-pronged strategy to boost growth: the Belt and Road initiative, coordinated development of Beijing - Hebei - Tianjin, and developing the Yangtze River economic belt. The Belt and Road initiative opens up the relationship with Central and West Asia, and thus Europe, connecting China with South East Asia and Africa. The AIIB, as part of this strategy was launched on Jan 16th. The article also covers the efforts under the Beijing-Hebei-Tianjin and Yangtze River Economic Belt.
 
 
To what extent should Western powers be threatened by China's increasing role in international affairs?
 
This article outlines China's increasingly large contributions and investments in Africa, its aid strategy, and the popular myths that are abound. The author concludes that China's aims should not be misjudged and that there is probably more room for cooperation than conflict between Chinese and Western entities.
 
 
The role of the AIIB in the investment sector to address Asia’s needs
 
There is currently a large amount of demand for infrastructure investment in Asia, prompting private organizations to attempt to fill that gap with strong financial support. The AIIB along with other global financial organizations like the World Bank and IMF play an instrumental role in maintaining investor in the infrastructure investment sector.
 
 
China, the renmenbi, and the AIIB
 
Prompted by selling done by Chinese firms, China has been spending hundreds of billions of dollars to bolster the yuan (RMB). Along with discussions about exchange rates, China plans on discussing the “financial architecture” of the world in the context of the announcement of the AIIB at the upcoming G20 summit.
 

AIIB just one opportunity for growing ties between China and Australia
 
China and Australia's strengthening trade and diplomatic relations only encourage further cooperation in political and economic ventures, such as the newly launched AIIB, of which China and Australia are both key members.
 
 
Bangladesh officially Joins the AIIB as a Full Member State.
 
On Tuesday, February 23rd, Bangladesh became a founding member of the Asia Infrastructure Investment Bank.  The parliament of Bangladesh has approved 6605 shares within the AIIB, each valued at US $100,000, allowing it to become a founding member in the China-led AIIB. The country will soon submits its subscription fees to the bank. State Minister for Finance and Planning, MA Mannan, remarked that membership in AIIB would not “hamper” the country’s relationships with World Bank or Asian Development Bank, and Bangladesh will seek AIIB’s funding for “development activities.”
 
 
US Policy Instigating China, Russia
 
US politics are increasing tensions with China and Russia and will cause a thermonuclear war with those two countries if American policy makers stay course. US policy requires China and Russia to back out of their current military endeavors abroad. Also, Washington is making every effort to counter China's AIIB, in order to protect Western financial interests.  As it is unlikely those countries will back out, war is a possibility on the horizon. 
 
 
Collaboration Across Development Banks in Sri Lanka

 
The ADB and AIIB are coordinating joint projects in Sri Lanka. ADB president, Takehiko Nakao, stated that this may be just the beginning for collaboration between the ADB and the AIIB. 
 
 
Poland to invest hundreds of millions into AIIB
 
The Sejm of the Republic of Poland has “completed the first reading of a bill,” which will ratify the country’s membership in AIIB. Polish Vice Minister of Foreign Affairs, Katarzyna Kacprzyk, commented that Poland’s decision to join the bank came after “thorough analysis.” Additionally, Kacprzyk noted that Poland’s involvement in the bank would increase bilateral relations with China, and help to strengthen cooperation with other Asian nations.
 
 
South Korea’s government to create “consultative body” to help local firms earn more business projects launched under AIIB.

The group will include “state-run policy lenders and private financial firms as advisors. Customs Today notes that representatives from the Korea Development Bank, the Korea Export-Import Bank and the Korea Trade Insurance Corporation will be included in this consultative body. An official from the South Korean Ministry of Finance stated that “tapping into the Asian market can offset the effects of a negative global slowdown stemming from China.” Furthermore, Customs Today reports that these firms are working to win about $35 billion in Asian development contracts through 2020. South Korea’s government will invest over $8 billion to get more local companies to participate in AIIB projects. South Korea maintains the fifth largest member sharer in AIIB.
 
 
G20 nations to meet in China this week.
 
G20 Finance Ministers will meet in Shanghai this Friday to discuss slowing growth and weak commodity prices, which affect China and others throughout the global economy. Channel News Asia remarks that China is at its lowest percentage of growth in over a quarter of a century, and its recent downswing could continue to send shocks throughout financial markets. The meeting this Friday will prepare for a more high-profile meeting of G20 leaders, which will occur in September 2016. That meeting will include US President Barack Obama and Chinese President Xi Jinping.
 
 
First stop, Iran. Next stop, Europe
 
As a part of China’s “Silk Road” Initiative, a high-speed rail has connected China to the Middle East and Europe. Recently, the One Belt-One Road initiative launched its first train, which traveled 5,900 miles between China and Iran. Another train journeyed 8,100 miles from China to Spain. The rail travels in roughly one third the time required of sea voyage. Underwood asserts that the rail will “accelerate the movement of goods between China and Europe,” while also increasing connectivity between Europe and Asia. Furthermore, The Trumpet emphasizes that relationships between China and Europe will only continue to grow. China’s largest trading partner is the European Union, and as recently as this past December, China was accepted into the European Bank for Reconstruction and Development.
 
 
ASEAN in stuck in tug-o-war match between the U.S. and China

Ota reports that the Association of Southeast Asian Nations, or ASEAN, is balancing its allegiances with the US and China. In attempts to deter Chinese influence, Ota reports that President Obama recently met with ASEAN countries and developed a new initiative, named “U.S. - ASEAN Connect.” Under the initiative, partnership countries will expand mutual trade and investment, aid technological development, promote science and technology, and advise ASEAN countries in creating small and midsize companies. So-called, “Connect Centers” will be constructed in three cities - Jakarta, Singapore, and Bangkok. However, affiliations with ASEAN countries depend heavily upon how well the US can meet rising needs throughout the Asian economy. As Yasu Ota notes, Asian markets confront issues with security in the South China Sea, the slowdown of the Chinese economy, and regional decreases in demand. Yasu Ota lastly notes that ASEAN countries pursue balance in their affiliations with the US and China, and therefore, “remain purposely ambiguous on some issues.”  





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