UNLIKE the United States with its preponderant presence in existing global lending bodies, China, despite its status as the initiator of the Asian Infrastructure Investment Bank (AIIB), does not seek a dominant role in the institution’s decision-making.

    Following a report by the Wall Street Journal that said China has proposed to forgo veto power at the AIIB to attract more countries to join the new bank, a senior Chinese finance official and a foreign ministry spokesperson both said it is a false proposition to say China seeks or relinquishes veto power.

    As an inclusive multilateral development bank, the proposed AIIB has been keeping its gate open for all members of the international community, and a growing membership means that the stakes held by each member will be diluted.

    The recent wave of enthusiasm among Western countries to join the Beijing-headquartered bank is by no means the result of a certain “lure” offered by China, but of the realization that the new bank has a bright future given factors such as China’s rich experience in infrastructure development, the enormous gap in funds needed to break the infrastructure bottleneck in Asia, as well as the region’s growing gravity in the global economy.

    The upbeat mood surrounding the China-initiated bank is also partially due to frustration over long-awaited reforms in existing global lenders such as the World Bank and the International Monetary Fund (IMF).

    The distribution of voting power in these organizations, which used to be the fundamental pillars of the Breton Woods System, has long been considered outdated as it no longer reflects the reality of the global economic landscape.

    Since the onset of the 2008 financial crisis, the World Bank and the IMF have embarked on reforms to give emerging economies a larger say, but apparently such efforts are not to the liking of the United States, which wields de facto veto power in both organizations.

    A proposal by the IMF in 2010 to increase the quota for under-represented members could not be implemented as of today, thanks to failure of the U.S. Congress to ratify the draft.

    While the AIIB will be a complement rather than a competitor for existing development banks, the emergence of the institution will be a great incentive for reforms at the World Bank and the IMF.

    Instead of carping on the fledging AIIB, it is better for Uncle Sam to focus on promoting reforms in the World Bank and the IMF, otherwise it won’t be long before he finds himself in a big playhouse with only a few playmates.  (Xinhua)