The China-led Asian Investment Infrastructure Bank (AIIB) is a symbolic institution with no real significance for the global financial system, according to some economists.
“We keep hearing that this bank is an unprecedented move by China, we’ve never seen anything like this before, it represents a dramatic change in governance of the global trade and capital flow regime – that’s all nonsense,” Michael Pettis, finance professor at Peking University, told CNBC on Thursday.
Many experts have said the bank is a threat to America’s current dominance within international financial institutions like the World Bank. 57 countries are founding members of the new bank, 37 of which are Asian countries, China announced on Wednesday. The U.S., Canada and Japan are the sole Group of Seven (G-7) countries that remain absent.