By THE EDITORIAL BOARD
MARCH 20, 2015
The Obama administration, to its embarrassment, has been spurned by Western allies flocking to a China-led Asian development bank, defying White House pleas to stand back. In a surprise announcement last week, Britain said it would become the first Western nation to join the Asian Infrastructure Investment Bank, a potential rival to the American-led World Bank. On Tuesday, Germany, France and Italy announced that they would also join the bank, and Australia and South Korea are expected to follow. Their decisions were proof that even Europe’s biggest economies, founders with the United States of the postwar global economic order, cannot resist the newest gold rush — into China, the world’s second-largest economy and a major export and investment market. Funding the new bank is another effort by China to become an even more dominant influence in the region. The Americans worry that China could establish a parallel economic order that could weaken the World Bank and its affiliates and erode already strained international lending standards of transparency, creditworthiness, environmental sustainability, and concern for labor and human rights that took decades to put in place. The British decision, in particular, is an affront to the United States. Britain has said the decision is in its national interest. With Russian money drying up because of Ukraine-related sanctions and a drop in oil revenue, the chancellor of the Exchequer, George Osborne, has courted Chinese investment in nuclear power plants in Britain. He said the City of London, a world financial center known for loose regulations, would become the base for the first clearinghouse for the yuan outside Asia, The Guardian reported.
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Is the Empire starting to crumble?
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