Obama Administration’s disregard Beijing-led Asian Infrastructure Investment Bank (AIIB), something that was a “strategic mistake,” said James Woolsey, a senior adviser to Donald Trump. He also says he expects a “much warmer” response from Trump’s administration to China’s One Belt, One Road infrastructure project.The statement of one of the new American president’s top advisers came after Trump’s harsh criticism of China during his electoral campaign.
Moreover, Trump vowed to review Washington’s stance on all global trade agreements, both in consideration and already ratified.
In this context, representative of the International Monetary Fund (IMF) Jerry Rice recently declined to comment on the possible outcome of Trump’s protectionist approach regarding the Trans-Pacific Partnership (TPP) trade deal. Experts say that TTP was the very same deal that prompted China to establish the AIIB and the New Silk Road project.
Analysts reacted to Woolsey’s remark, saying that Washington’s support for the AIIB would be a generous gesture towards Beijing. If Trumps endorsed United States’ participation in the AIIB and supported the Silk Road initiative this could pave the way for new investment agreements between China and the US.
“China can invite the United States to join the AIIB after Trump’s inauguration,” Wang Huiyao, a director at the Beijing-based Center for China and Globalization, told South China Morning Post.
In particular, the change-of-heart statement about China was made after Trump has called to introduce 45-percent import levies on Chinese goods and declare Beijing a currency manipulator.
The Chinese government has been seriously concerned about this rhetoric, said Nikita Maslennikov, an expert at the Russian Institute for Modern Development.
“Of course, Beijing is concerned. I guess Trump’s team wanted to send a signal to China that his electoral promises were rhetoric and the actual situation will be different. Possibly, Trump’s strategy towards China will be adjusted. The statement by his adviser is a signal of such an intention,” Maslennikov said in an interview with Sputnik China.
According to him, Trump has made a clear hint to China that both sides should consider a scenario for cooperation.
Moreover, the words by Trump’s adviser show that Washington wants American banks to play a new role in the Chinese market. In this context, the US wants to stimulate certain steps by Chinese partners, the expert pointed out.
“First of all, Washington wants the Chinese domestic market to be opened for American investment banks, similar to Goldman Sachs and Morgan Stanley,” he suggested.
Currently, such financial institutions can operate in China but there are restrictions for certain operations. They also have to create a joint company with a Chinese partner, thus working on behalf of a Chinese company according to the local market rules.
“I guess this situation will be changed. Beijing has repeatedly sent signals it was working on lifting restrictions for direct involvement of American investment banks in the Chinese market. This would allow for improving risk management and making the Chinese market more transparent for US companies. This is why currently Trump’s team wants to correct his image as a president ready to negotiate and cooperate,” Maslennikov said.
Trump may decide to support Washington’s membership in the AIIB and Beijing would support this decision, said Bian Yongzu, an expert of the Center for Financial Studies at the People’s University of China.
“Beijing has said that for the US the doors to the AIIB are open. The main goal of this bank is to fund infrastructure projects across Asia and help regional economies. In turn, Trump has pledged to develop the real sector in the US economy. Washington’s membership in the AIIB could create new opportunities for American economic development,” he told Sputnik China.