Originally published April 16 2015
China's World Bank to put an end to dollar imperialism in developing nations
by J. D. Heyes
(NaturalNews) A number of U.S. European and Asian allies are opting to join a China-led bank as Beijing continues to adopt policies aimed at undermining Washington's economic influence around the globe.
As noted by Tyler Durden at Zero Hedge, in recent days it looked like the Obama administration had convinced a number of America's closest allies to put off, for now anyway, joining the Asian Infrastructure Investment Bank, "a sinocentric institution aimed at promoting development across Asia" that is meant to compete with the U.S.-Japan-led Asian Development Bank while as part of a "seismic" effort to "shift away from the world's traditionally U.S.-dominated institutions such as the World Bank and the IMF."
But then, just when the administration thought it had accomplished its goal of convincing allies to hold off for now, the United Kingdom announced that it would become a founding member of the China-led bank, calling it an "unrivaled opportunity."
Even China rivals are thinking about joiningAccording to The New York Times, Washington sees the Chinese venture as a direct challenge to the post-World War II economic order (a conflict in which the United States was instrumental in saving China from the ravages of the Imperial Japanese army):
Washington has expressed reservations about the new institution, on the grounds that it would not meet environmental standards, procurement requirements and other safeguards adopted by the World Bank, the International Monetary Fund and the Asian Development Bank for their lending projects.
But fundamentally, Washington views the Chinese venture as a deliberate challenge to those postwar institutions, which are led by the United States and, to a lesser extent, Japan, and the Obama administration has put pressure on allies not to participate.
Durden notes that Zero Hedge and a number of other economic analysts observed following the news that Britain would join the new China-led bank that the UK's decision would likely lead other American allies to join as well.
"In (very) short order, everyone from Germany to Australia to Luxembourg was suddenly ready to cast their lot with the Chinese despite U.S. warnings that the bank won't adopt the proper operational standards," he wrote, adding that the U.S. opposition is likely nothing more than an attempt to undermine Chinese ambition - an observation supported by the Times' report.
Reuters reported further that Japan, South Korea and Australia were also considering joining the bank, against the wishes of the Obama White House, though the Japanese government remained "divided":
Japan, Australia and the South Korea, all major U.S. allies, are the notable regional absentees from the AIIB. The United States, worried about China's growing diplomatic clout, has questioned whether the AIIB will have sufficient standards of governance and environmental and social safeguards.
Passing of global hegemony will not come cheapIt may seem odd that China's rivals - Japan being the most important of them - would join an investment bank led by Beijing, against U.S. council, given that Washington provides so much military support to the allies in question. But their decisions to join a China-led financial initiative are obviously being made with the belief that the Asian economic giant is on a greater path to dominance in the region where those nations are located. The decisions may also reflect doubts about President Obama's commitment to the United States' Asian allies, and the security of Asia in general.
U.S. hegemony around the world has suffered under the current administration, and it doesn't appear to be on the rebound anytime soon. These decisions to join a Chinese-led development bank are not being made by petulant leaders of renegade countries who are bent on defying Obama for the sake of it; they are being made by leaders who sense that the era of U.S. global dominance is waning, and moreover, that Americans - and American leaders - are generally comfortable with that.
What China ultimately seeks to do is replace the U.S. dollar as the world's reserve currency with the Chinese yuan. If that happens, you can bet that the resultant loss of U.S. global hegemony won't be painless.
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