The New Development Bank and the Asian Infrastructure Investment Bank: China's Ambiguous Approach to Global Financial Governance
I am grateful to the organizers of the workshop on ‘Beyond Bretton Woods: Complementarity and Competition in the International Economic Order’ at Boston University, where an earlier version of this article was presented, especially Kevin Gallagher and William Kring II. I thank the other participants in the workshop, especially Eric Helleiner, Chris Humphrey and Rebecca Ray, for their input. Special thanks go to Natalie Lichtenstein for her very helpful comments and suggestions; I am grateful also to the anonymous referees for their feedback. All errors remain mine alone.
ABSTRACT
The creation of the New Development Bank (NDB) and the Asian Infrastructure Investment Bank (AIIB) has generated a great deal of attention and controversy in the development community and beyond. Do these banks indicate that China is promoting a new model of multilateral development finance that undermines the existing system dating back to Bretton Woods? What are the forces shaping China's policy choices in this area? In contrast to the prevailing tendency to view these banks as part and parcel of the same challenge or opportunity for multilateral development financing, this article highlights major distinctions between the NDB and the AIIB. The fact that China is playing a prominent role in both the NDB and the AIIB suggests that China is not promoting a coherent new model of multilateral development financing, but is instead straddling different traditions in this realm of global financial governance. The ambiguity in China's approach to multilateral development finance is shaped by its multiple identities and complex economic and political interests.
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