China

Weekly Round-Up

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U.S. Development Policy/International Organizations

  • Ahead of this weekend’s G20 summit, World Trade Organization (WTO) members India and the United States agreed to extend a “peace clause” to 2017 allowing India to maintain its food subsidy program. The deal ends a WTO stand-off on trade facilitation that supporters describe as the biggest crisis the organization has faced in its two decade history. Implementation of the trade facilitation agreement would add $1 trillion to the global economy
  • Multilateral banks jointly backed G20 plans for the Global Infrastructure Initiative, a global hub that would share information to help match investors with projects. The Australia-led initiative comes on the heels of the formation of the Chinese led Asian Infrastructure Investment Bank (AIIB) set to launch in 2015.
  • USAID is drafting new internal policy prohibiting future covert, democracy-promotion efforts in hostile foreign countries that reject USAID funds. Recent USAID off-the-books democracy-promotion in Cuba prompted internal review and a critical response from Senators Patrick Leahy, D-Vt., and Jeff Flake, R-Ariz.

Asia-Pacific

Leaders gathered for the APEC Summit in Beijing this week,

Leaders gathered for the APEC Summit in Beijing this week, but much of the action took place on the sidelines of the official meetings.

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The Weekly Round Up

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This week in development…

Women in Port-au-Prince, Haiti, preparing food for distribution to undernourished children and their mothers. Photo taken from DFATD|MAECD's flickr photostream used under a creative commons license.

Women in Port-au-Prince, Haiti, preparing food for distribution to undernourished children and their mothers. Photo taken from DFATD|MAECD’s flickr photostream used under a creative commons license.

  • The Bill and Melinda Gates foundation announced on Wednesday that it would donate $50 million to fight Ebola. The money will go to organizations already involved in the emergency response, including certain U.N. agencies, other international organizations, and various West African governments.
  • The pentagon announced it would construct a 25 bed field hospital in Liberia. The U.S. Agency for International Development requested the hospital, and will require a $22 million commitment. There are currently no plans for American personnel to staff the hospital after it is established; Army Colonel Steve Warren said that upon completion of the hospital the Department of Defense will “turn it over to the government of Liberia and then the DoD personnel will depart.”

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One Country, Two Systems: Democracy and Unrest in Hong Kong

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By Charles Rice and Jing Jin

On August 31, the National People’s Congress Standing Committee announced that any candidate participating in the 2017 elections for Hong Kong’s Chief Executive position will require support from at least 50 percent of a “broadly representative” nominating committee. Presumably, the committee be composed of Pro-Beijing interests, and will wield de facto power to select Hong Kong’s new Chief Executive. The announcement has spurred a new round of civil unrest across Hong Kong, and comes at the end of a summer which saw hundreds of thousands of pro-democracy protesters take to the streets.

HK Skyline

Hong Kong faces stark questions regarding the place of Democracy in its future

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The Asian Infrastructure Investment Bank: China’s Pet MDB

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By Julia Marvin

In late 2013, President Xi Jinping announced his interest in founding the Asian Infrastructure Investment Bank (AIIB), a Chinese-led development bank that would address the large financing gap resulting from regional infrastructure demands. The Asian Development Bank (ADB) can only produce about $13 billion annually in new loans – just a fraction of the projected $8 trillion needed over the next decade in order to sustain growth. The AIIB, with its $50 billion initial capital endowment, intends to step in and help fill the gap.

Xi and Jim Kim

World Bank Group President Jim Yong Kim meeting with Chinese President Xi Jinping

Chinese Finance Minister Lou Jiwei touted the advantages of a Chinese-led investment bank, saying “Asia is in direct need of investment, especially in infrastructure, but ADB’s current capacity is really insufficient… By comparison, the China Development Bank has been doing commercial infrastructure loans and its business size is far bigger than the ADB and World Bank combined – and that happened in less than 20 years.” The AIIB would initially focus on re-vitalizing the Silk Road as well as general infrastructure needs in the region.

The AIIB is a manifestation of China’s desire to change the status quo of international lending. There is a stark political impetus for this move, especially given the context of the recent BRICS bank announcement.  The ADB and the World Bank are seen as OECD dominated institutions, and China has been one of the leaders in attempting to construct an alternative set of international structures.  China and other Middle Income Countries are eager to pursue the institutional bells and whistles of the developed world, but the type of lending and leadership these institutions will offer remains unclear.

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