China’s frivolous new bank By ALEX BRUMMER

THE isolation of America and its close ally Japan over the creation and support for the new Asian Infrastructure Investment Bank (AIIB), led by China, becomes more acute.

The AIIB has been seen in Washington and Tokyo (from where I recently returned) as a rival to the Washington-based World Bank and IMF founded in 1944. In a speech ahead of this month’s spring meetings of the World Bank its president, Jim Yong Kim, decided to embrace the AIIB arguing such regional banks could become ‘great new forces’ in economic development.

There is much about the AIIB not to like. The planned structure, which would see China as a very dominant shareholder with 40pc, is a worry. There are also genuine concerns about transparency and governance of any institution based in Beijing, not to mention China’s flippant approach to human rights issues.

George Osborne ignored these factors when the UK became the first advanced nation to sign up to China’s bank, starting a stampede that has seen France, Germany, New Zealand and Australia come in.

One can understand Osborne’s willingness to get in first despite American hostility. The Government wants to make London a centre for renminbi foreign exchange trading and fund raising, and it also desires to improve Britain’s lagging export performance in China.

But it is also distasteful to kowtow to Beijing given the way that UK companies, most notably Glaxo-SmithKline, have been targeted for corruption. GSK behaved disgracefully but Whitehall’s insouciance is disturbing in the face of vengeful foreign governments using British firms as political footballs, as seen with BP in the United States.

In many ways the Americans, particularly Congress, are largely to blame for China insisting on setting up its parallel development bank.

The US Congress has been a longterm roadblock to reform of the Bretton Woods institutions to give the newly emerging giants of Asia-Pacific a greater say. The hold-up on quota reform at the IMF, that would give China a share which matches its economic size and a bigger say in deliberations, is among the factors which have caused Beijing to strike out on its own.

Wouldn’t it have been far better, as former Treasury Secretary Lawrence Summers suggested earlier this week, if the administration had been more four-square behind IMF-World Bank reform and put some muscle into convincing a recalcitrant Republican Congress to change its mind?

World Bank boss Kim’s offer to work more closely with the new institution is a sensible compromise. But with every development bank comes duplicated structures, including expensive and comfortable sinecures for the directors and staff of the new bank, money that could be better used to alleviate poverty.

The London-based EBRD, the glis- tening bank, long ago outlived its purpose of rebuilding Eastern Europe and has sought to stretch its remit to the Middle East so as to justify its existence.

But no one ever has the courage to say it has outlived its purpose and should be dissolved. The AIIB is in danger of being no more than a Chinese-controlled boondoggle.

Speedy service

WE should not be surprised that corporate America is seeing Europe as a growth opportunity. Eurozone pessimism will not persist for ever as the latest survey from the purchasing managers shows.

Moreover, the collapse in the value of the euro against the dollar has turned the whole of the continent into a bargain basement at a time when US corporates are able to raise debt at super-cheap rates.

So the post-Easter bid of $4.8bn (£3.2bn) by the FedEx super-fast delivery service for European rival TNT Express would seem to make sense. Unlike the previous bid for TNT, from another American buyer UPS, there is little overlap to worry competitors. The main bar would presumably be euro-nationalism which is considerably harder to overcome than the free-for-all atti- tude to overseas takeovers that exists in the United Kingdom.

FedEx’s arrival on some scale will need to be monitored closely by Royal Mail. GLS, its European parcels service, is unregulated and regarded as a jewel in the former state-owned company’s crown.

Essentially, it is a cheaper slow-mail service rather than a supercharged fast delivery. Nevertheless, an American behemoth on its turf may not be entirely welcome.

Switching channels

MOST recent media speculation has focused on the idea of ITV being snapped up by one of the US cable giants, following the sale of Channel 5 to Viacom. The potential bid by ITV for the television production arm of the financially fragile Weinstein Company would be an important step in the opposite direction.

It reflects the determination of ITV boss Adam Crozier to turn the commercial broadcaster into a creative powerhouse. That has become all the more critical with the Balkanisation of terrestrial television.

Mob Wives, Marco Polo and War and Peace are among the gems so far hatched by Weinstein.

Quite a change from soon-to-be-retired Downton.