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US Allies Join China’s AIIB: What Now?

March 31st marked the deadline for countries to join the China-sponsored Asian Infrastructure Investment Bank (AIIB) as founding members. A surprising number of American allies, including Taiwan, South Korea, Germany, and Australia, joined over Washington’s objections, emboldened, it seems, by Great Britain’s decision to break ranks with Washington.

An unnamed American official disparaged London’s “constant accommodation” to Beijing’s interests.

The diplomat is right, of course. The British government has acquiesced to China’s refusal to allow democracy in Hong Kong. Prime Minister David Cameron has obsequiously courted access to trade with China by promising not to meet with the Dalai Lama. But Washington hasn’t stood up to China on Hong Kong or Tibet either. And it has stood by while China slowly but surely establishes military strong points throughout the South China Sea.

Arguably Washington’s behavior is worse since it actually has leverage it could use. But Washington hasn’t seemed interested lately. President Obama’s “pivot to Asia” is hollow. His Trans-Pacific Partnership, a trade initiative, seems doomed to failure, thanks to a lack of a concerted effort by the president to lobby either Congress or his Democratic Party for support. Political reforms in Burma stalled years ago, while the administration surrendered its leverage by lifting sanctions. Militarily, the pivot is more sound than fury.

The AIIB’s defenders argue that Beijing needs to help make the rules, not just be bound by them. That view gives short shrift to the role of American leadership in setting up the post–World War II order. “We didn’t set up the international system the way we did simply because we were the strongest power but because we were  the strongest power with a particular set of values,” says Gary Schmitt of the American Enterprise Institute, a Washington think tank. “People seem to assume that because China has this new power it gets to set norms. That’s not how we handled the Soviet Union.”

It is, for now, how the US is handling China. Washington’s approach is based on ignoring the kind of government China has, and the effects that will have as its influence expands. Political change is not on anyone’s agenda in dealing with Beijing. At one level, that means the US is doing nothing to curb the most intense political crackdown in decades. At another, the US is responding ineffectually to China’s rise. Meanwhile, American allies are left with the impression that they should accommodate China, even at the expense of alienating the US.

Disagreement over membership in the AIIB revives memories of the transatlantic dispute over the arms embargo the EU imposed on China after the June 4, 1989, massacre of democracy protesters. Ten years ago, the EU flirted with the idea of lifting the embargo. Washington was caught off guard, having paid little attention as Beijing cultivated more and more European capitals.

It took time to persuade Europeans that Washington’s concern was genuine, based on a bipartisan belief in America’s responsibility for keeping the peace in Asia, especially the defense of Taiwan, rather than a proprietary US interest in monopolizing relations with China.

Washington didn’t do enough to follow up on the lessons from this episode. Formally the embargo remains in place, but European countries have sold Beijing diesel submarine engines, missiles, and other advanced weaponry.

Great Britain and other members of the AIIB will insist that they can shape the institution’s rules and practices from the inside. How likely is it that countries willing to sell Beijing advanced weaponry that could be used against the US will stand up to Beijing over issues of governance and transparency?

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