Major American Allies Ignore U.S. Pleas and Join China’s Alternative Bank

UK, Australia, New Zealand, Singapore and India All Sign On … South Korea Next?

Update: The Financial Times now reports that France, Germany and Italy have all agreed to join the China-led international development bank as well, “delivering a blow to US efforts to keep leading western countries out of the new institution.”

This week, 2 major U.S. allies – 2 of the “Five Eyes” – have disregarded American pleas and joined China’s new development bank … alternative to the US-dominated IMF and World Bank lending order. (A third member of the Five Eyes – New Zealand – previously signed onto the Chinese bank.)

Specifically, the UK and Australia signed on this week.

The Financial Times reports, quoting a senior US Official:

[The decision of the UK to join the Chinese development bank was made with] virtually no consultation with the US.

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

The New York Times reported last week:

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…

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South Korea and Australia, both of which count China as their largest trading partner, have seriously considered membership but have held back, largely because of forceful warnings from Washington, including a specific appeal to Australia by President Obama.

Zero Hedge predicted last week:

In short order Australia and South Korea will likely be on board and at that point, the stigma the US has created around membership will have completely disappeared (if it hasn’t already), opening the door for other US “allies” to join ….

An Op-Ed in The Australian argues:

The decision by the Abbott government to sign on for negotiations to join China’s regional bank … represents another defeat for Barack Obama’s diplomacy in Asia.

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Canberra’s move follows similar decisions by Britain, Singapore, India and New Zealand.

Make no mistake — all this represents a colossal defeat for the Obama administration’s incompetent, distracted, ham-fisted dip­lomacy in Asia.

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Since then, the Abbott government has felt absolutely zero subjective good will for Obama.

This is an outlook shared by many American allies.

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The Obama administration has neither the continuous presence, nor the tactical wherewithal nor the store of goodwill or personal relationships to carry Canberra, or other allies, on non-essential matters.

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Such prestige as the US enjoys in Asia these days rests disproportionately on the shoulders of the US military.

Obama has neglected and mistreated allies and as a result Washington has much less influence than previously.

The saga of the China Bank is almost a textbook case of the failure of Obama’s foreign policy.

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Obama treats allies shabbily and as a result he loses influence with them and then seems perpetually surprised at this outcome.

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The consensus is that the Obama White House is insular, isolated, inward-looking, focused on the President’s personal image and ineffective in foreign policy.

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  • Dirt_Road_Poet

    Fact is everytime I have to exchange my funds to US funds to buy from China the US gets a cut of the exchange fee. Then they get a second cut when the Chinese company has to convert to the Yuan. This adds about 5% to my costs just so the US fed gets paid. I can see why countries would sign on and rid themselves of this fee. The downside is the US will have to look at new ways to find income as this brings in Billions each year.

  • Carl_Herman

    This could be a huge, game-changing deal. The “developed” nations’ so-called “monetary system” is a debt-creation system whereby the 99.99% repay credit to the .01% banksters forever in a system that is like adding negative numbers forever. That is, we’re owned by the asset-holes as debt slaves.

    This means we’re an “Emperor’s New Clothes” breakthrough away from an actual monetary system, of course.

    That said, until this breakthrough, it’s just another day at the activists’ office to think, speak, and take action for the brighter future we all know is ready to roll-out 🙂

    • Southernfink

      Carl, would you be able to offer any advice on reposting Eric Zuesse articles or perhaps contact him to mention that I know several sites that are interested.

      Email me if you like.

  • cettel

    Thanks again, George, for bringing all this together. I had read some of that before, but seeing all of it, as you presented it, makes clear to me that Obama is losing, big-time. What a relief this is! The only countries that are with the U.S. now, when things come to a crunch, are Poland, Latvia, Lithuania, and maybe Estonia — and, of course, the northeastern half of Ukraine, if the split of Ukraine becomes institutionalized. The U.S. aristocracy is being abandoned by almost every other nation’s aristocracy. The “Washington Consensus” is nearing its last rites. America’s nazi aristocracy cannot control the world, after all.

  • Options Market Signals 2007-Like Crash Risk, Goldman Warns 03/17/2015

    An epic decoupling in the cost of put protection and SP earnings multiples may be a bad omen for stocks as Goldman suggests a “substantial market correction may be on the horizon.”

    http://www.zerohedge.com/news/2015-03-17/options-market-signals-2007-crash-risk-goldman-warns

  • evader2014

    Obama foreign policy regarding Iran has been sabotaged by Congress, so don’t expect foreign nation-states to value US policies generally.

  • bucear

    What a surprise, the US is upset that others are joining the bank, complaining about this having the effect of extending Chinese influence. What a bunch of hypocrites — opposing anything that erodes its own imperial power over the developing world. Good on UK for joining, hopefully the US will realize this is the 21st century

  • Southernfink

    All nations on earth must conduct international trade in the privately owned, created out of thin air, nominated currency or they will immediately qualify as a potential threat to the national security by the Usual Suspects.

    Any journalist who dares to ask serious questions will be met by a thick as a brick reinforced wall with the freshly & hurriedly painted words — sorry I cannot answer your question – this is a matter of national security – your security clearance simply isn’t good enough, (and never will be) have a nice day.

  • Tony B.

    So far no one here seems to see what is actually going on. Simply put, when Britain was the first in Europe to join the Chinese investment bank it was a matter of the Rothschild dynesty deserting the dollar – as they have raped all dollar nations to death – and trying to get its nose under the new tent hoping for new blood. One hopes China has the guts to keep them at bay.