From the FT:
China will officially launch a new $50bn Asia Infrastructure Investment Bank on Friday as it steps up its challenge to global financial institutions like the World Bank that it feels are dominated by America and its allies.
But only 20 mostly small economies, many of them effectively client states of China, will become founding members of the bank at Friday’s ceremony in Beijing after Washington lobbied furiously to stop other countries from signing up.
…India will be the only large economy to sign up to the Chinese initiative at the ceremony in the Great Hall of the People in Beijing on Friday morning, according to people familiar with the matter.
It will be joined by Mongolia, Uzbekistan, Kazakhstan, Sri Lanka, Pakistan, Nepal, Bangladesh, Oman, Kuwait, Qatar and all of the Association of Southeast Asian Nations except Indonesia.
…US officials have said they do not want to support an initiative Washington thinks is unlikely to promote good environmental, procurement and human rights standards in the way the World Bank and ADB are required to do.
But Chinese officials view American opposition as an attempt to contain its global rise and its ambition to be the dominant power in Asia.
Reading between the lines, it seems Australia’s FTA negotiations have suddenly been caught up in this Great Game. From the AFR:
Australia has been given a two-day deadline to decide whether to become a foundation member of China’s controversial new infrastructure bank, which may become one of the region’s biggest new lenders.
The time pressure comes as federal cabinet remains split on the issue between those who want closer economic integration with China and those who are concerned about Beijing’s control of the institution.
Treasurer Joe Hockey, who is in the Chinese capital, and Trade Minister Andrew Robb are believed to be generally supportive of the proposal to set up the $US50 billion ($57 billion) Asian Infrastructure Investment Bank.
Others, such as Foreign Minister Julie Bishop, are believed to be more reserved and have urged the government to use the bank as leverage with China over free-trade deal negotiations.
One doesn’t want to over-read things. Circumstances are often just chaos in action. But it does seem awfully coincidental that China suddenly imposed a severe punishment on Australian coal very recently and now it’s being dangled as a carrot if certain conditions in the FTA are met. There is also this today from BS:
The federal government has signalled a major overhaul to the significant investor visa program as it looks to divert the billions of dollars raised from the scheme away from low-risk investments such as government bonds into areas such as venture capital and small-cap companies.
The Abbott government also plans to tighten scrutiny surrounding the visa program, as well as the newly announced $15 million premium investor visa scheme, amid concerns some people with criminal links and corrupt officials could be exploiting the program to fast-track their entry into Australia.
Another coincidence?
It’s all speculation at this point but it does go to show that putting arbitrary deadlines for the successful completion of tough negotiations rather telegraphs your position!
