China is rapidly advancing towards her ultimate goal of controlling the world’s reserve currency. China has announced a $100 billion competitor to the World Bank, IMF and ADB, which it will call the “Asian Infrastructure Investment Bank”.
China is expanding plans to establish a global financial institution to rival the World Bank and the Asian Development Bank, which Beijing fears are too influenced by the US and its allies. In meetings with other countries, Beijing has proposed doubling the size of registered capital for the proposed bank to $100bn, according to two people familiar with the matter.
China’s push for a regional institution that it would control reflects Beijing’s frustration at western dominance of the multilateral bodies. Chinese leaders have demanded a greater say in institutions such as the World Bank, International Monetary Fund and Asian Development Bank for years but changes to reflect China’s increasing economic importance and power have been painfully slow.
“China feels it can’t get anything done in the World Bank or the IMF so it wants to set up its own World Bank that it can control itself,” said one person directly involved in discussions to establish the AIIB. “There is a lot of interest from across Asia but China is going to go ahead with this even if nobody else joins it.”
Perhaps most interesting is not just the challenge to Western banking dominance that the AIIB represents, but the direct challenge to regional Western hegemony in the Middle East: The fund would include plans to build a rail system connecting China with cities in “West Asia” (China’s name for the Middle East) as far as Baghdad.
So far, 22 countries across the region, including several wealthy states in the Middle East, which China refers to as “West Asia”, have shown interest in the multilateral lender, which would be known as the Asian Infrastructure Investment Bank. It would initially focus on building a new version of the “silk road”, the ancient trade route that once connected Europe to China.
Let’s be clear: On a financial level, the AIIB is another blow to global USD dominance and to Bretton Woods, but on a trade-level, the fund further re-structures Asian commerce to China’s advantage for the foreseeable future.
Given that all prior threats to USD dominance (Oil for Food, the Libyan gold dinar, et c) have resulted in the relatively swift beating of war-drums, one can only speculate at what this greatest-ever threat not just to dollar dominance, but to Western global-hegemony itself will translate to in military terms.