Global Economic Governance And Asian Infrastructure Investment Bank (AIIB)

Abstract

The concept of Global Economic Governance is evolving with the new institutions and actors having complex norms and rules, aim to resolve global economic issues. In such conditions, it’s significant to analyze the actions of emerging economies of the world. Likewise, the peaceful rise of China with its remarkable economic achievement in a few decades, make China step towards resolving regional and global economic and political complications. The formation of the New Development Bank, Shanghai Corporation and Asian Infrastructure Investment Bank (AIIB) are an identical example. The contemporary economic governance framework resembles the post-war hierarchy, almost comprehends the changing context, especially the economic rise of other states. In addition, the economic rise of China started to explore its roles and responsibility in the architecture. As a result, China initiated the Asian Infrastructure Investment Bank (AIIB) as an innovative institution to meet the development challenges of China and the region. The rationale behind the establishment is to fill the infrastructural gap of Asia, which is the major cause of underdevelopment in the region. The bank functions as other multilateral development institutions. There are presently 100 members (regional and non-regional) countries organized collectively to meet the objectives of the bank. However, the United States and Japan are not the members of the institution, accusing the bank of being a low standard in the international system. The position of Japan and the United States made a clear indication that they are not willing to accept China as a leader in the world economic architecture. Moreover, these states view as a threat to the existing institution like the World Bank and Asian Development Bank initiated by the United States and Japan. Therefore, the act by China is considered as a new leader in the global economic architecture breaks down the western domination of world economic order. Now, its challenge for the initiator to make the bank more responsive in solving global economic issues and to be within in its principle of lean, clean and green.