US Imperialism unable to stymie China's AIIB
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by Max O
The United States has recently suffered a major setback in its opposition to the Chinese initiated Asian Infrastructure Investment Bank (AIIB). The European powers of Britain, France, Germany, Italy have abandoned the Obama administration’s prohibition of the AIIB and will now join up, demonstrating the US is no longer the undisputed financial global power which it enforced through institutions like the World Bank and the IMF over the last 70 years.
With Europe breaching the US imposed ban, Australia now feels safe to also join the AIIB. But only after Prime Minister Abbott personally explains Australia's position to US President Obama before it is ratified by the LNP government cabinet, as a client state should before leaving its master's orbit.
Strategic versus the commercial
Why such assertive behaviour from allies and client states? The uni-polar world order that the US envisaged under American tutelage is disappearing and its power can only be sustained politically/militarily not economically.
European countries, Australia, South Korea and possibly Japan are enticed to join the AIIB for sound capitalist commercial reasons. America's allies can either obediently back up US strategic objectives and get nothing in return, or seek out valuable economic opportunities through the AIIB.They have chosen their immediate commercial self-interest. One area of economic disagreement was the Obama administration’s attempts to refuse credit through the World Bank and IMF to countries like India for use on a new generation of coal-fired electricity power stations.
Obama's position against funding coal powered electricity stations, because of its contribution to global warming, has caused friction with countries who want to join the AIIB so as to fund this cheap energy generation. In contrast the AIIB is more likely to be disposed to the appeals of nations such as India.
Japanese industry is eager to sell their "ultra-super-critical coal-fired" electricity generator systems, which burn brown coal more 'efficiently', to countries such as India and have impatiently pushed for Tokyo to join the AIIB. The expansion of coal-fired power stations would be a windfall for Australia's coal exporters and a shot in the arm to the waning Japanese economy.
The AIIB offers a silver lining to Australia and Japan who wish to see developing countries take up coal powered generation. Japan and Australia have united at international forums to oppose the US campaign of no lending to those nations seeking cheap 'efficient' coal-fired generation.
If you can't beat them, join them!
The US, facing noncompliance from allies who wish to sign up to the Chinese backed infrastructure bank, now proposed that the AIIB work in cooperation with the Washington approved World Bank and the Asian Development Bank. As Murdoch's Australian newspaper stated on the 24 March, 2015: "The collaborative approach is designed to steer the new bank towards economic aims of the World's leading economies (read American) and away from becoming an instrument of Beijing's foreign policy."
The AIIB's potential to promote new coalitions and bypass American dominated financial institutions, such as the World Bank and IMF, is the US's over-riding fear as its crucial allies sign up to China's epoch-making infrastructure bank. The US administration wants to use their banking institutions to co-finance projects with Beijing's initiated bank so it can have a hand in the deliberations of the AIIB and also support American companies to bid on the new bank's projects.
To use their lexicon "co-finance" is an attempt to ensure that the AIIB will complement rather than compete with the World Bank, IMF, OECD and the Asian Development Bank. With 188 member nations, the World Bank is the leading international financial institution and the US has consistently opposed China's wish to increase its influence within it.
US strategic control depends now on military not economic power
The China-sponsored AIIB is another blow to the US economic dominance of the Asia-Pacific region and is motivation for their “Pivot to Asia” strategy to maintain their hegemony. The weakening global economic position of American capitalism over the last couple of decades has seen its ruling class increasingly willing to rely on the riskier option of choosing military force to continue its global dominance.
Whilst Australia may dabble with China's AIIB it dutifully lines up with the US military strategy within the Asia-Pacific region. It supports the “Pivot to Asia” by hosting 2500 US Marines in Darwin, numerous US military bases and regularly participates in US aggressive wars in the Middle East.
The phenomenal growth of Chinese capital over the last three decades has shown that economic domination of Asia is up for grabs. This is reflected in the opportunism of important US allies such as Britain, an economy that is more and more dependent on the parasitic and speculative activities of its chief finance houses and banks, whose membership of the AIIB increases British capital’s opportunity to profit from augmenting the financial role of China's renminbi currency.
After the Second World War the US became the unchallengeable economic world power, via the establishment of the World Bank and the IMF. With the US losing its economic and financial dominance, European capitalism has now begun to pursue its own self-interest.
As can be observed contradictions are breaking out all over the place amongst capitalist countries. Consequently conflicts between major imperialist powers will increase as the global capitalist economic crisis worsens.
In the pursuit of opportunities for capital accumulation major capitalist countries will to have to protect their economic ventures with an increased military posture. The conflict over the AIIB points to a significant shift in the political and economic centres of gravity that can only have perilous results in the coming future.
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