The Asian Infrastructure Investment Bank: A Qualified Success for Beijing's Economic Statecraft

In 2013, China's growing economic capacities motivated Beijing to launch a multilateral bank to advance its diplomatic agenda. Scholars are still debating precisely what Beijing seeks to accomplish through the Asian Infrastructure Investment Bank (AIIB). This article surveys the key literature on the AIIB, identifying twenty scholarly interpretations of Beijing's strategic goals. The purpose of this research is to understand Beijing's initial design for this bank and evaluate whether this new multilateral development bank can function as an effective instrument for Beijing's economic statecraft. Over its first five years, as an economic tool for Beijing, the AIIB has performed quite remarkably well. The bank not only operates smoothly, generating a reasonable amount in net income for its shareholders, but also serves Beijing's strategic purposes in expanding China's regional influence, enhancing its international status, and ascending toward global leadership.

“Establish Regional Architecture”

Chapter 9 focuses on the political components of China’s grand strategy to build regional order. It shows how the Global Financial Crisis caused China to depart from a blunting strategy focused on joining and stalling regional organizations to a building strategy that involved launching its own institutions. China spearheaded the launch of the Asian Infrastructure Investment Bank (AIIB) and the elevation and institutionalization of the previously obscure Conference on Interaction and Confidence-Building Measures in Asia (CICA). It then used these institutions, with mixed success, as instruments to shape regional order in the economic and security domains in directions it preferred.

New Realms of Influence: Infrastructure Development, Financial Institutions and Markets

The renewed emphasis on Asia’s connectivity infrastructure has brought into focus the complex relationship between pursuing economic development through trans-state linkages and promoting political agendas. The formalizing of transit flows across the Asian space has involved financial, technical and regulatory relations bringing together the interests of actors at various levels. This article examines how these have been used by China to create new realms of influence through a study of the working of the Asian Infrastructure Investment Bank and Chinese markets across Central Asia, in order to demonstrate the complex role that these play in determining the contours of a relationship based on infrastructural financing and trade. The extent to which these globalized corridors and systems of governance might be impacted by the pandemic, however, remains to be seen.