Europe’s support for a China-led international bank is a sign that confidence is waning in U.S. leadership on the global stage and recognition of the need to forge closer ties with an increasingly powerful Beijing, analysts say.
According to media reports this week, Germany, France and Italy have followed the U.K. and joined the $50 billion Asian Infrastructure Investment Bank (AIIB) set up by China last year and is viewed as a rival to the Washington-based World Bank.
“This says as much about the loss of U.S. influence in international political and economic affairs as it does about the growing clout of China,” Nicholas Spiro, managing director at consultancy Spiro Sovereign Strategy in London, told CNBC.
“The Europeans have been losing faith in U.S. leadership for some time now and their willingness to become founding members of the AIIB is partly a reflection of this,” he added.
Analysts say the context here is important to understand the tension over the AIIB.
For years, China and other major emerging markets such as India have argued for a greater say in global financial institutions such as the International Monetary Fund (IMF) and World Bank to reflect their growing economic strength.
China has grown rapidly in recent decades to become the world’s second biggest economy and many economists expect it to overtake the U.S. as the world’s leading economy over the next few years.
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