Tag: AIIB

‘West still treats Africa as former vassals’

Western “colonial” states are not interested in South Africa’s development, but rather want to take its natural resources and never give anything back, pres. Jacob Zuma, told RT. It’s China’s investment that Zuma sees as a way to prosperity.

“The Western world or the European countries, in particular, came to Africa [in the 19th century] to colonize and they had been taking the resources of Africa,” Zuma said.

But even after the continent decolonized itself in the mid-20th century, its relationship with the US, UK, France and other Western countries “remained the same,” he stressed.

“They still regard us as the Third World, as a kind of people, who must be related to as the former subject [state], etc. That talks also to the economics… Their intention has never been to make the former colonial countries develop,” the president explained.

Zuma believes things “would never be the same” with China, which has been heavily investing in Africa since the early 2000s, as it came to the continent “as equals.”

“The Chinese come differently. They come to do business with us. They are ready to help… The results would be that African countries will be empowered,” he said.

China is educating African students and building highways in many countries, while the Western states “only built roads from mining areas to harbors,” the president added.

China is currently South Africa’s top trading partner, and Zuma expressed confidence that recent attacks on foreigners, in which Chinese citizens were affected, won’t lead to a cool down in relations between Pretoria and Beijing.

“The issue of xenophobia was exaggerated in South Africa,” he said, adding that the true reasons for the attacks lay outside racial issues.

The South African leader pointed out that thousands across the country had taken to the streets to protest xenophobia after five people died in violence in Durban in mid-April.

Despite “some things here and there,” South Africa was one of only two African nations approved as one of the 57 founding members of the Chinese-led Asian Infrastructure Investment Bank (AIIB).

Beijing and Pretoria will also join efforts to establish the BRICS bank (New Development Bank), with South Africa set to host the new financial institution’s regional center. The countries comprising the BRICS group are Brazil, Russia, India, China and South Africa.

Zuma criticized existing international financial institutions, such as the International Monetary Fund and the International Bank for Reconstruction and Development, saying that “it’s very difficult to pinpoint the real exemplary kind of delivery by these institutions,” and that African countries “got into more difficulties” by relying on their assistance.

The idea of the New Development Bank has “brought the fresh breath in the system,” he said.

“BRICS has brought the bank, which is a developer; which is going to operate differently… It’s focusing on the Third World, not just on the Third World, but whomever else. And it’s actually aimed at helping to uplift countries that need help,” the president said.

Meeting with Zuma, Russian President Vladimir Putin advocated BRICS development as a vehicle for improving the economies of Russia and South Africa.

Zuma arrived in Moscow on Vladimir Putin’s invitation as guest at the May 9 military parade dedicated to the 70th anniversary of Victory over Nazi Germany.

He stressed the importance of the occasion as “at times, people have got short memories. They might be forgetting that we came from a very serious situation, which led to many deaths.”

The South African president observed that the Soviet Union had “suffered a great deal” during World War II, noting that “the turning point of the defeat of fascism was done by the Russians.”

Source: RT

France, Germany, Italy join China’s Infrastructure Investment Bank

France, Germany and Italy have confirmed they’ll join China’s new Asian Infrastructure Investment Bank (AIIB). Participation in the rival to the US-led World Bank is seen as a setback for the Obama administration.

The three European countries on Tuesday confirmed in a statement they intend “to become founding members of the Asian Infrastructure Investment Bank,” according to AFP.

“We want to bring our long experience… to help the bank build a solid reputation,” said German Finance Minister Wolfgang Schaeuble, speaking also for Italy and France at a joint press conference with Chinese Deputy-Premier Ma Kai on Tuesday in Berlin. He added that the three countries want to make a contribution to the positive development of the Asian economy, in which German companies were actively taking part.

Chinese Foreign Ministry spokesman Hong Lei welcomed the decision, saying “the AIIB is an open and inclusive multilateral investment institution.”

“Participation by countries outside the region will intensify the extensive representatives of the AIIB,” he added.

The decision of the three European countries comes after Britain last week became the first Western country to agree to become a founding member of the AIIB, FT reports. The UK government said the decision was in the country’s national interest, but it got a negative reaction from the United States.

The new China-led bank is expected to challenge the Washington-based World Bank, so the US is increasing pressure on its allies not to join the institution. The US’ concern is that the new investment bank might not have high standards of governance and environmental and social safeguards.

The new bank is expected to challenge the Western dominance of the US-led World Bank and IMF in global infrastructure projects, which experts believe will create healthy competition.

South Korea, Switzerland and Luxembourg were also considering joining the Asian Infrastructure Investment Bank, the Financial Times reported.

Australian Prime Minister Tony Abbott said he would make a final decision on AIIB membership soon. South Korea and other countries are in discussions with China over possible participation.

China’s main regional rival Japan said earlier this month that Asian countries including Japan have until March 31 to decide on becoming AIIB founding members.

“They told us they are considering. Whether Japan will join, we do not know. It is Japan’s own decision,” Chinese Finance Minister Lou Jiwei said, according to the Xinhua news agency.

Nearly 30 countries have confirmed their participation in the AIIB, which is aimed at helping finance infrastructure projects across Asia and is expected to come into being this year.

The AIIB was formally launched by Chinese President Xi Jinping in 2014, and is expected to become a tool of a broader Chinese push for growing international power and economic significance.

US attacks London’s ‘constant accomodation’ of China

The Obama administration accused the UK of a “constant accommodation” of China after Britain decided to join a new China-led financial institution that could rival the World Bank.

The rare rebuke of one of the US’s closest allies came as Britain prepared to announce that it will become a founding member of the $50bn Asian Infrastructure Investment Bank, making it the first country in the G7 group of leading economies to join an institution launched by China last October.

Thursday’s reprimand was a rare breach in the “special relationship” that has been a backbone of western policy for decades. It also underlined US concerns over China’s efforts to establish a new generation of international development banks that could challenge Washington-based global institutions. The US has been lobbying other allies not to join the AIIB.

Relations between Washington and David Cameron’s government have become strained, with senior US officials criticising Britain over falling defence spending, which could soon go below the Nato target of 2 per cent of gross domestic product.

A senior US administration official told the Financial Times that the British decision was taken after “virtually no consultation with the US” and at a time when the G7 had been discussing how to approach the new bank.

“We are wary about a trend toward constant accommodation of China, which is not the best way to engage a rising power,” the US official said.

British officials were publicly restrained in criticising China over its handling of Hong Kong’s pro-democracy protests while Mr Cameron has made it clear he has no further plans to meet the Dalai Lama, Tibet’s spiritual leader — after a 2012 meeting that prompted a furious response from Beijing.

While Beijing has long been suspicious about US influence over the World Bank and International Monetary Fund, China also believes that the US and Japan have too much control over the Manila-based Asian Development Bank. In addition to the AIIB, China is the driving force behind last year’s creation of a Brics development bank and is promoting a $40bn Silk Road Fund to finance economic integration with Central Asia.

The Obama administration has said it is not opposed to the AIIB but US officials fear it could become an instrument of Chinese foreign policy if Beijing ends up having veto power over the bank’s decisions.

The UK Treasury denied that Britain had acted out of the blue, saying there had been “at least a month of extensive consultation” at a G7 level, including with Jack Lew, US Treasury secretary.

George Osborne, UK chancellor of the exchequer, was unrepentant, arguing that Britain should be in at the start of the new bank, ensuring that it operates in a transparent way. He believes it fills an important gap in providing finance for infrastructure for Asia.

“Joining the AIIB at the founding stage will create an unrivalled opportunity for the UK and Asia to invest and grow together,” Mr Osborne said. He expects other western countries, which have been making positive noises privately about the new bank, to become involved.

Beijing launched the AIIB in October with the backing of 20 other countries but Japan, South Korea and Australia —US allies in the region — did not become founding members. There has been a strong debate within the Australian cabinet about whether to join, after US pressure to stay on the sidelines.

Mr Osborne’s decision reflects London’s desire to pursue commercial relations with China aggressively, even at the expense of antagonising Washington.

The UK has been keen to establish the City of London as a platform for overseas business in the Chinese currency as it starts to play a bigger role in the global economy.

Source: FT