Asian way: Chinese President Xi Jinping (center) shows the way to the guests attending the signing ceremony for the Asia Infrastructure Investment Bank (AIIB) at the Great Hall of the People in Beijing in October last year
span class="inline inline-center">
I refer to the article 'Asia's multilateralism and America's opposition to AIIB,' (The Jakarta Post, April 15) by Joseph E. Stiglitz.
It is not difficult to understand. The US made the wrong fundamental choice and is concerned that China will leave it behind, as the trend continues.
Some would argue that time is on Beijing's side. To do well, a nation must pick one or more areas of expertise, so that the comparative advantage will sustain continued growth. China picked infrastructure building as one such major area.
The Asia Infrastructure Investment Bank (AIIB) is not about 'controlling the Asian economy'. It is a job program. China over the past 40 years has garnered a very big competitive advantage in infrastructure engineering and building. It has the only viable 24-hour-a-day (three shifts), seven-day-a-week engineering force under capable management.
Already Chinese engineering companies can make bids worth 30 percent less than their Western counterparts and still make money. All it needs is some legal tweaking in the ability to write change orders (the most profitable part of any infrastructure project) into its contracts (both the US and British lawyers are quite good at that).
In contrast, what did the US choose? Financial engineering (a la derivatives trade), US$1.3 quadrillion dollar market and not a single product made, to the detriment and exclusion of Main Street.
Today, America is a political system thoroughly hijacked by bankers. The year 2008 was only the beginning. After the debacle, the financial elites spent a couple of hundred million dollars lobbying (bribing) their cause.
As a direct result, no bankers went to jail, and Washington ended up forking over $26 trillion in illegal (by WTO rules) subsidies to the financial industry, in the form of no interest and ultra-low interest loans.
Bajie Zhu
Jakarta
Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.
Thank you for sharing your thoughts. We appreciate your feedback.