Two public goods that are truly inclusive

The Belt and Road Initiative and the Asian Infrastructure Investment Bank are both manifestations of Chinese multilateralism

The nexus between the Belt and Road Initiative and the Asian Infrastructure Investment Bank, both of which are ambitious global public goods initiated by China, has been a frequent topic of debate for the international community. With some people questioning the bank's purpose and querying whether it is just a vehicle for promoting China's Belt and Road Initiative.

But it should be noted that the AIIB is an international organization and not a specialized agency under China's Belt and Road Initiative program. The AIIB Articles of Agreement have no mention of it working for the Belt and Road Initiative in particular. Indeed, India, which has not joined the initiative, has so far received 1 in 3 US dollars of the AIIB's approved financing totaling $8 billion.

However, it is equally clear that the AIIB does not shy away from the Belt and Road Initiative, as it shares the same objectives and purposes: sustainable infrastructure and cross-border connectivity.

So why has the issue become so delicate and sensitive? There are both technical and ideological reasons for this.

The technical reason relates to the quality of the Belt and Road Initiative projects. Opponents claim that Belt and Road projects have poor records of transparency, fiscal sustainability, environmental protection, or community engagement, and thus fail to meet the standards of the AIIB.

The rule of thumb in infrastructure investment is that money talks. It is the privilege of the bank funding a project to apply its standards to the project. The Export-Import Bank of China applies its own policies and standards, rather than someone else's, in a project it funds. Similarly, a Belt and Road Initiative project using AIIB money is governed by the standards of the AIIB.

Thus, multilateral and bilateral financiers interested in the Belt and Road Initiative should cooperate and coordinate their efforts to ensure the standards are high and feasible, particularly in projects they are co-financing.

The deeper, ideological reason for attempts to keep the AIIB away from the Belt and Road Initiative is the prejudice of some developed countries toward China, which has long been framed as a significant threat to Western democracy and US supremacy. The United States is particularly unhappy about China changing the world it has long dominated. Neither is it happy about the way China is doing so: China's multilateralism.

Chinese multilateralism is a combination of well-established development theories, including the best practices of Western development, with developing countries' needs, in particular their limited capabilities.

Chinese multilateralism is essentially based on the multilateralism of the US, which contributed to long-term peace and prosperity under the framework of global governance rules, embroidered by international best practices, after the end of World War II.

However, the voice of developing countries was little heard, and because of this, the design and implementation of international rules and standards have failed to take their local conditions and needs into consideration, and thus failed to produce the hoped-for results. This in turn has harmed the reputation of US multilateralism.

Chinese multilateralism corrects this defect by being responsive to the needs of developing countries, while maintaining a rules-based, high-standard system. In this line, the voice of those often forgotten in other international organizations must be heard in the AIIB.

Chinese multilateralism is well positioned to improve US multilateralism, because of the successful development experiences of China and other Asian countries. China promotes "the principle of achieving shared growth through discussion and collaboration", enabling the needs and concerns of all stakeholders to be heard, including those of borrowers.

A typical question related to Chinese multilateralism is: Won't China be a hegemon once it becomes No 1 economy, as the US and the United Kingdom were? My reply is no. A hegemon has two composite elements: it must be powerful, that is a prerequisite, and then based on its power, impose its will on others. A powerful China will not interfere in the internal affairs of other countries.

China is prone to reflect inwardly on how it can improve and reform itself, it does not seek external solutions to handle challenges and solve problems. A good example is the overall approach China has chosen in handling the current trade frictions with the US. China has chosen to open up and better its business climate to mitigate conflict with the US, rather than conduct a tit-for-tat trade war, which would be chaotic for the two countries as well as for the world.

The author is a teacher at Beijing Foreign Studies University and author of Chinese Multilateralism in the Asian Infrastructure Investment Bank and The Law and Governance of the Asian Infrastructure Investment Bank. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

(China Daily Global 05/09/2019 page13)