TIME Economy

U.S. Attacks Britain Over Support For China-Backed Bank

A family photo shoot fir the APEC leaders' meeting at the International Convention Center at Yanqi Lake in Beijing
Kim Kyung Hoon—Reuters U.S. President Barack Obama gestures next to China's President Xi Jinping during the APEC leaders' meeting at the International Convention Center at Yanqi Lake in Beijing on Nov. 11, 2014.

In a rare public spat between the two allies, an Obama aide has criticized the U.K's stance toward Beijing

The U.S. government has expressed its disapproval of the U.K.’s application to become a founding member of the $50 billion Asian Infrastructure Investment Bank (AIIB), the first G7 country to do so since the institution was launched last year to provide funds for infrastructure in the Asia-Pacific region.

“We are wary about a trend toward constant accommodation of China, which is not the best way to engage a rising power,” a senior Obama administration official told the Financial Times on Thursday. The statement marks a rare breach in the “special relationship” that has long defined U.S. – U.K. relations.

Washington officials view the Beijing-led institution with suspicion, fearing it will not meet the standards of governance and safeguards set by the Washington-based World Bank and the International Monetary Fund (IMF), and the Japanese-backed Asia Development Bank.

The White House has been lobbying its allies not to join the AIIB, concerned that China is trying to extend its reach in the region and that the bank could end up being overly influenced by Beijing foreign policy if it has veto power over decisions.

Meanwhile British Chancellor George Osborne, the driving force behind the U.K.’s decision to join the bank, said in a statement that Britain should be involved early on to promote “closer political and economic engagement” with the Asia-Pacific region and encourage the two regions “to invest and grow together.”

[Financial Times]

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