Fo­cus mis­placed in Tai­wan’s AIIB membership bid

The China Post - - COMMENTARY -

Tai­wan ear­lier this week sent in an al­most lit­er­ally last-minute ap­pli­ca­tion to join the Chi­naled Asian In­fra­struc­ture In­vest­ment Bank (AIIB) ini­tia­tive as a found­ing mem­ber.

The rush to beat the dead­line just min­utes be­fore the ap­pli­ca­tion closed on mid­night March 31 was rather em­bar­rass­ing, show­ing how ill-pre­pared Tai­wan was for such an am­bi­tious ini­tia­tive.

Since then, lit­tle dis­cus­sion has been heard con­cern­ing the benefits and ne­ces­sity of join­ing the AIIB, tak­ing for granted that it must be good.

Even Fi­nance Min­is­ter Chang Sheng-ford sug­gested that it would not hurt much los­ing the min­i­mum NT$2.2 bil­lion Tai­wan would have to put into the AIIB even if the bank failed.

In­stead, much of the at­ten­tion has been di­rected to­ward a po­lit­i­cal is­sue rather unique to Tai­wan be­cause of its diplo­matic iso­la­tion: What name would Tai­wan ac­cept for its AIIB membership?

High-level gov­ern­ment of­fi­cials have vowed that it would be un­ac­cept­able if Tai­wan had to join the bank as “Tai­wan, China,” or ‘Taipei, China” — names un­der­scor­ing Bei­jing’s sovereignty claims to the is­land.

Our na­tion has hardly ever been al­lowed to use its of­fi­cial ti­tle “Repub­lic of China,” or the now com­monly used name “Tai­wan.” In in­ter­na­tional or­ga­ni­za­tions where it is al­lowed to play a part — such as the In­ter­na­tional Olympic Com­mit­tee — it is re­ferred to as “Chi­nese Taipei,” which seems to be the one pre­ferred by the gov­ern­ment for its membership in the AIIB.

The name is­sue may not be to­tally ir­rel­e­vant, but there is an­other kind of po­lit­i­cal game brew­ing in this AIIB ini­tia­tive that Tai­wan must be more wary of.

The estab­lish­ment of the AIIB is as much a po­lit­i­cal game as an eco­nomic one, pitch­ing China against the United States.

The eco­nomic prospects for the AIIB look promis­ing. There is US$8 tril­lion in de­mand for fund­ing for in­fra­struc­ture devel­op­ment around the world up un­til 2020, ac­cord­ing to a study con­ducted in 2010 by the Asian Devel­op­ment Bank (ADB), of which Tai­wan is a mem­ber rep­re­sented as “Taipei, China.” (Yes, Taipei, China — one of the names that the gov­ern­ment says it won’t ac­cept for its AIIB membership.)

It re­mains to be known how Tai­wan can lever­age the AIIB plat­form to have a share of th­ese huge in­vest­ment op­por­tu­ni­ties, as many as­pects of the China-led ini­tia­tive have yet to be determined.

Cer­tain pro­pos­als have been made for the AIIB: China prom­ises that it will not have veto power, the kind that the United States has in the In­ter­na­tional Mon­e­tary Fund (IMF); and the reg­is­tered cap­i­tal will be US$100 bil­lion.

Only the found­ing mem­bers — those who ap­plied for membership by March 31 — will be able to in­flu­ence and set the rules of the game within the AIIB.

This is the rea­son why Tai­wan is so ea­ger to be­come a found­ing mem­ber. But would it be re­ally able to ex­ert its in­flu­ence?

We can al­ready fore­see some form of arm-wrestling among the found­ing mem­bers in shap­ing the op­er­a­tions of the AIIB. But how would Tai­wan play along in this game?

Tai­wan waited so long be­fore sub­mit­ting its ap­pli­ca­tion for AIIB membership be­cause it would not dare to make a move with­out some form of un­der­stand­ing from the U.S.

If it is ac­cepted into the AIIB as a found­ing mem­ber, will Tai­wan be able to make a ma­jor move with­out the un­der­stand­ing of the big boss in the bank, namely China, which has to be blamed for Tai­wan’s predica­ment?

China says it is not seek­ing veto power in the AIIB, but that does not mean that it is not seek­ing dom­i­nance.

If Tai­wan had to take sides in ar­gu­ments be­tween China and other AIIB mem­bers, which side would it take?

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