China’s latest economic weapon
Entering 2016, the Asian Infrastructure Investment Bank (aiib) is preparing to take leaps and bounds. The rise of this bank should have the world, and particularly the United States, on high alert. The success of the aiib heralds the dawn of a new era in Asia—one increasingly influenced by China.
It was announced on Dec. 30, 2015, that Philippine President Benigno Aquino supported the recommendation that the Philippines join the aiib.
The move comes as somewhat of a surprise because the Philippines is in the midst of a heated island dispute with China. Many consider the aiib to be an opportunity for China to extend its influence deeper into Southeast Asia.
Washington led a campaign through 2015 to try and stifle the creation of the aiib. It was unsuccessful. The U.S. strongly urged its allies to avoid joining. President Barack Obama thought allies like Australia would fall in line. He was wrong.
President Obama is so opposed because the World Bank is a U.S.-run institution that provides international loans to countries for capital programs. It has served to promote U.S. interests in Southeast Asia and around the world since World War ii. The aiib is a direct threat to the influence of the World Bank—and subsequently U.S. primacy—in Southeast Asia.
What Is the AIIB?
aiib’s website decribes itself as:
[A] modern knowledge-based institution, [which] will focus on the development of infrastructure and other productive sectors in Asia, including energy and power, transportation and telecommunications, rural infrastructure and agriculture development, water supply and sanitation, environmental protection, urban development and logistics, etc.
In more tangible terms, it will finance seaports, airports, roads, railroads and other infrastructure projects.
Wielding a Bank
Chinese control of the aiib means it can use the promise of funding as an incentive for “good behavior.”
What if you were the Philippines? You need money to enhance supply lines and increase trade flow. You may be more willing to forget about China’s intrusive man-made islands in exchange for a favor from the aiib.
Debt to China
When a nation can’t repay in cash, China will take payment in other forms. Look at Venezuela. China loaned the country $56.3 billion according to Inter-American Dialogue data. When Venezuela couldn’t make repayments and China refused a bailout, President Nicolás Maduro paid in oil. Now that the commodity boom in China is ending, it has no reason to bail out such indebted nations.
China uses economic resources as a weapon. It is hard to resist Chinese belligerence when you owe them something. The economically weak and vulnerable nations of Southeast Asia acquiesce to the Chinese. Even Australia isn’t immune. Perhaps it wouldn’t have sold use of the Port of Darwin for 100 years at a price of just over $500 million had it not been so indebted to China.
For years, the Trumpet has foretold the rise of China as it relates to Bible prophecy. Today, we see how China is dominating Southeast Asia economically. It even has the means to challenge the U.S.-dominated World Bank, an institution that has financed global projects for decades. China is a force to be reckoned with. That is a warning that doesn’t just go out to the poor nations of Southeast Asia, but to everyone—the United States included.
The aiib is one of China’s greatest economic victories in modern history: It will be used to shackle the region to China’s agenda. ▪
Full article: AIIB Gaining Momentum Into 2016 (The Trumpet)