Is China a Challenger? The Predicament of China`s Reformist Initiatives in the Asian Infrastructure Investment Bank

Abstract

This paper assesses whether the establishment of the Asian Infrastructure Investment Bank（AIIB）signals China`s reformist intention in the area of international development. I use both descriptive and inferential statistics to compare power distribution in the World Bank, the Asian Development Bank（ADB）, and the AIIB, and the composition of the AIIB membership. Evidence shows that there is no obvious structural difference in voting power among the three banks. The major difference between them is that China is the most powerful state in the AIIB. For the time being, at least, the AIIB does not signal Beijing`s intention to reform the current system. Instead, the bank seems to be an instrument for China to compete with established international financial institutions. However, Beijing may be faced with several challenges. First, dissatisfied members of the World Bank will not find a remedy for the organization`s shortcomings in the AIIB. The problem of unequal representation structure remains. Second, the AIIB is unlikely to facilitate formation of a China-led alliance, nor is it likely to adopt global best practice due to disparity of interests among its members. Third, Washington and Tokyo are probably right to refuse to join the AIIB and to devote more attention to strengthening the World Bank and the ADB instead. Greater competition among the three is likely to reduce the AIIB`s influence. To sum up, it is difficult to detect any reformist intention behind the AIIB, and it is still too weak an organization to facilitate formation of a strong alliance by means of which China can carry out its international agenda.