China-led bank to aid development

China's Asian Infrastructure Investment Bank has a commendable aim: to boost regional growth. An agreement by France, Germany and Italy to follow Britain's lead in becoming founding members, against the wishes of ally the US, can therefore not be faulted. For Washington, the idea rivals the Asian Development Bank while contributing to the spread of Chinese soft power. But politics is not on the minds of the governments; business interests are driving their decision.

The US made a point of criticising the bank when it was unveiled by President Xi Jinping at the Asia-Pacific Economic Cooperation summit in November. It contended that the goal of investing in infrastructure in Asia was already being done by the ADB, controlled by Japan and the US, and on a global level by the World Bank and International Monetary Fund. British Chancellor of the Exchequer George Osborne's announcement last Thursday was bound to cause anger, with the US contending that it had not been adequately consulted by its ally. The claim was rejected; Osborne countered that joining at the founding stage would "create an unrivalled opportunity for the UK and Asia to invest and grow together".

He is right; Asia needs more infrastructure. It is why 21 nations were quick to join and Indonesia and New Zealand are among others to also sign on. US pressure is behind alliance partners Australia and South Korea holding back, but their governments are now considering joining. China's bank is causing a landmark acceptance of the new multipolar world order and a willingness to work with, not against, it.

The ADB's president is always Japanese and despite promises, the World Bank and IMF have not moved away from US and European dominance. China's search for a way of having a bigger role in development was inevitable and the nation's vast cash reserves and infrastructure expertise made a Beijing-centred bank obvious.

Some nations worry that under Beijing's watch, governance, neutrality and social responsibility will not meet international standards. But by refusing to join, there will be no chance to advocate, educate or enforce.

China's rise, along with other fast-developing nations, makes maintaining outdated global institutional structures unrealistic. Increasing numbers of Western governments now realise that. It is not a matter of political savvy or being a good ally; it is about development and investment.