Global finance a game of the more the merrier

China's decision to establish Asian Infrastructure Investment Bank to provide financing for infrastructure projects in the region and beyond has created tension between the United States and some of it allies.

The United Kingdom has decided to join the AIIB as a founding member, which has encouraged Germany, France and Italy to follow suit. Australia and Canada are also weighing over joining the AIIB. For the US, these developments are like a decisive crack in the anti-AIIB front. On Sunday, Nathan Sheets, the US treasury undersecretary, said the Obama administration is proposing a formal partnership between AIIB and the US-dominant World Bank.

The dollar-based international financial system has been led by the US for about 70 years. The US draws its strength from its monetary power, along with its military might and network of security treaties. But the key institutions in this system such as the International Monetary Fund, the World Bank and the Asian Development Bank give other countries, including the UK, little space to play a leading role in the world economy and in influencing global finance.