politics

Chinese media see international bank as diplomatic coup

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The USA puts up 17.69 % of the capital (SDRs), holds a 16.75 % voting share at International Monetary Fund (I.M.F.) and a veto.

China puts up 30.34 % of the capital at Asian Infrastructure Investment Bank (A.I.I.B.), holds 26.06 % of the voting rights at A.I.I.B. but no veto.

In simple words, the USA can kill I.M.F. decisions, even if they are approved by 83.3% of the votes, all members except USA, because of its veto.

China "can not" kill A.I.I.B. decisions approved by 73.94 % of the votes because it has no veto.

You do not have to be a genius to figure out the A.I.I.B. has a management system which is fairer and much more justified than that of I.M.F..

5 ( +6 / -1 )

Yamiko Otokawa wrote:

Under the articles of association, China will initially have 26% of the votes in the bank, giving it a veto over some key decisions which require a 75% majority

It's stated in the article that China does have veto power.

1 ( +2 / -1 )

Because it is a coup. The U.S. dollar's pre-eminence is being threatened. And the subsidies the world provides to the U.S. economy through this arrangement are imperiled.

1 ( +1 / -0 )

Speed

26% voting rights will not translate as 75% majority for every decisions. China have to share the Veto with India or Russia which will become 75% majority. For example China 26%, India 7.5% and Russia 5.9% will become the Veto. It is true that those founding members will dominate the decision making.

1 ( +1 / -0 )

It is a coup. And now China and Chinese companies will have a monopoly doing all the infrastructure development throughout developing Asian countries. Too bad for US (ie Halliburton) and Japan. Waining US influence. Get used to the new normal. I trust that when Abe and his ilk are gone Japan will do the sensible thing and join the bank.

0 ( +1 / -1 )

I'm not comfortable with this bank being administered by China that clearly has governance issues. And with China's growing desire to dominate economically and politically over its neighbours ,I'm concerned their motives are not genuine.

0 ( +2 / -2 )

All this maneuvering by China is somewhat like a big monopoly game and the end game is one of ownership,influence, and control !!

0 ( +0 / -0 )

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