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Showing posts from April 23, 2015

China's New Investment Bank: A Premature Prophecy

"China's New Investment Bank: A Premature Prophecy is republished with permission of Stratfor."







Global Affairs


APRIL 22, 2015 | 08:00 GMT 



By Mark Fleming-Williams






Former U.S. Treasury Secretary Lawrence Summers wrote on April 5 that this month may be remembered as the moment the United States lost its role as the underwriter of the global economic system. His comments refer to the circumstances surrounding China's launch of a new venture, the Asian Infrastructure Investment Bank (AIIB). Wary of China's growing ambitions and influence, the United States had advised its allies not to join the institution, but many signed up anyway. The debacle was undoubtedly embarrassing for Washington, but even so, Summers' prophecy is a bit premature at this stage.





To understand why, one must first understand the basis of the United States' dominant economic position in the world. At the height of World War II, the heavily indebted United Kingdom signed the Lend-Lease deal,…