The Asian Infrastructure Investment Bank (AIIB) is the first intergovernmental multilateral development institution led by emerging economies, with its fundamental aims being to support infrastructure construction in Asian economies and promote regional economic cooperation.
 

The establishment of the AIIB will be conducive to promoting the economic development of Asian economies and regional economic integration. The public-private partnership mode will efficiently bridge the infrastructure gap. It is a win-win measure to build the AIIB.
 

Compared to the BRICS Development Bank, the establishment of the AIIB has attracted more attention from the globe. 
 

The motivation for major European countries to join the AIIB can be analyzed from two aspects. The first aspect is the need of European countries to conform to national interests. Since 2008, European countries have suffered serious setbacks due to the global economic crisis. They have witnessed substantial decline in economic growth and even faced the risk of the break-up of the eurozone. Meanwhile, the US, which offered economic assistance to Europe after World War II, has been busy enough with its own affairs and economic turmoil.

Europe is urgently seeking a new platform for economic development. China’s “One Belt, One Road” initiative, or Silk Road Economic Belt and 21st Century Maritime Silk Road, offers many investment opportunities for European countries to turn around their economic slowdown. European countries therefore ignored US opposition toward joining the AIIB and successively applied. For the UK, joining the AIIB will make it become a hub for cross-border trade settlement in yuan, continuing the advantage in the financial industry.
 

The second aspect is Europe’s requirement to compete with the US by backing the AIIB and developing Asia. Since the global financial crisis, the US has begun to strategically depress the euro by downgrading credit ratings of European countries. Meanwhile, European countries have realized that they couldn’t compete economically with the US even as the European Union. In terms of not only national interests but also global competition, Europe needs a developing partner.

In order to maintain its leading role in the global financial system, the US has expressed strong opposition to the AIIB. However, the current financial system has its flaws and the US has adopted many radical policies, including multiple rounds of quantitative easing, to boost economic development.
 

However, these policies have resulted in many economies suffering from more serious financial risks, rather than bringing benefits to them. It therefore can be concluded that it will be hard for the US to uphold the existing financial governance system. In this sense, the US should rethink its future AIIB strategy.

The addition of Western countries to the AIIB is poised to spur the bank’s development.
 

The UK’s support led many other Western countries to join the AIIB, which enhanced the bank’s global prestige and upgraded it from a regional to global financial institution. Furthermore, Western countries joining the AIIB will also enhance its role in sovereignty credit rating to better realize its initial aim. These countries also urge the AIIB to operate transparently and avoid becoming a politicized institution, which is also conducive to promoting its development.
 

The establishment of the AIIB marks a significant step for China in participating in global financial governance. China has played the role of a major country in challenging the existing governance structure, indirectly boosting the reform of the international financial order and largely reflecting the demands of emerging economies.
 

Against the backdrop of the sluggish global economy, the US has played a lesser role in leading the global economy and China’s “One Belt, One Road” initiative has been recognized by the world. China will play a more influential role in strengthening the global economy and global financial markets in future, while also taking its own economy and the AIIB’s development to its next level.

 

Gao Bei is from the Institute of World Economics and Politics at the Chinese Academy of Social Sciences.