(Sankei: April 17, 2015 – p.2)
There is no need to panic that Japan may miss the bus.
It turned out that the China-led Asian Infrastructure Investment Bank (AIIB) will have 57 founding members. This is a number comparable to the Asian Development Bank (ADB).
Some people are calling for Japan to join the AIIB by exaggerating the isolation of Japan and the U.S. for not joining or the divisions in the G7.
This is misguided. We would rather like to point out the serious concern that participating despite lingering concerns about China’s arbitrary operation of the bank will leave sources of trouble for the future.
Japan and China will resume financial talks in mid-June after an interval of three years and two months. Japan should stand firm on its position of questioning China. It must remain cautious about joining the AIIB if China fails to come up with convincing explanations.
China will be the biggest donor to AIIB, whose headquarters will be located in Beijing, and it will appoint the bank’s first president. The member states are slated to finalize the organizational structure and loan screening procedures by the end of June and sign the agreement to establish the bank.
Will fair and sound management be guaranteed by then? We doubt it very much.
A proof of this is that Taiwan has been rejected as a founding member. Taiwan demanded equal treatment like the other founding members, as in the case of the Asia-Pacific Economic Cooperation (APEC) forum, but China, which regards Taiwan to be part of its territory, refused.
Since China is allowing political issues to affect the management of the bank, it is doubtful that it will be able to maintain impartiality as an international organization.
Furthermore, even if a board of governors with representatives from the member states will be set up, it will be pointless if this will not be a permanent body and will serve only to rubber stamp China’s decisions on project loans.
The question is, What are the merits if Japan participates? At present, Japanese companies are only able to win 0.5% of contracts even in the ADB loan projects. They will have even less chances under the AIIB, where Chinese companies will be able to win bids easily by price cutting.
By the government’s estimates, Japan will be asked to make at least $1.5 billion (approximately 180 billion yen) in contributions initially if it decides to join. This will be meaningless if Japan will not be able to exercise influence befitting its contribution and will not be able to benefit sufficiently.
Certain developing countries are hoping that Japan will play the role of counterbalancing China. Some people claim that Japan should try to influence China from within. However, unless China adopts a sincere attitude and tries to dispel the concerns of other countries, it is very unlikely that the situation will change.