In a New York Times article that I had read 2 days ago, it described an interesting situation developing between China and the United States over the role of global and regional organizations. President Xi Jinping and the Chinese government had proposed and had pledged a new development bank that targets its neighbors and Asia. This is the latest manifestation of US-China competition within the great Asia-Pacific rim area, especially in the realm of global financial institutions.
Towards the end of World War 2, the Bretton Woods Conference had set up international financial institutions such as the International Monetary Fund, the World Bank and other associated agencies, such as the Asia Development Bank. With the surfeit of money that these agencies had, they have been doing good work around in the arena of global development. They had promoted doing good work in its provisions of global financial management, but now with the rise of China as a major financial player in the world, I believe there are needs to be addressed in this arena.
The US government has been worried that the founding of China's new development bank will severely undercut the Bretton Woods institutions that had been set up many years ago. I think this is a good opportunity for the institutions to work with each other. They can use the World Bank's experience and expertise coupled with China's newly minted financial strength in order to mitigate any misunderstanding, which could lead to mutually cooperative and constructive policies, versus mutually destructive competition. In the New York Times article, the Asian Development Bank had estimated that over 8 trillion dollars is needed in just transportation infrastructure, which is an amount that both the A.D.P. and the World Bank cannot afford to lend to these regions. I think it's time for the Obama administration and the US government to step up to the plate and to put a bigger commitment in mutually cooperative and beneficial policies.
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