The Creation of the Asian Infrastructure and Investment Bank: America’s Loss and China’s Gain

The Global Financial Crisis (GFC) pulled institutions together diplomatically and economically. It clarified options and failures of the past and hastened coordinated reforms. But the GFC also starkly illuminated another geopolitical dynamic: Deals struck in extremis must be adhered to after parties leave the negotiating table. Failure to do so can cause embarrassment, recriminations, and unintended consequences with long-term implications that run counter to the original aims and objectives of U.S. policymakers and reformers. This sequence of events played out with the long holdup of agreed International Monetary Fund voice and vote reforms, and the birth of the Asian Infrastructure and Investment Bank, which hastened the rise of China while weakening the role of the Bretton Woods institutions.