US Dollar Standard In Jeopardy: Australia, Germany, France and Italy to Join China’s Infrastructure and Investment Bank

I have recently blogged  about out how the US government has been losing political capital. In the context of geopolitics, UK has decided to join China’s $50bn Asian Infrastructure Investment Bank, the first among the G-7 nations despite American protests.

But bad news appear to be mounting for the US as many other nations appear to be jumping aboard China’s project.

First, Australia warms up to the Chinese  project.

From the Australian Financial Review:

The Australian Industry Group has urged the federal government to push ahead with joining China's specialist infrastructure bank declaring this would make the country an active participant in the changing economic landscape of the region rather than just a bystander.

The business group's chief executive Innes Willox welcomed signs the government was changing its mind on the institution saying this would position Australia as a player in strategic decision making in regional infrastructure investment and further its regional trade activities.

Treasurer Joe Hockey signalled last Friday that Australia was reconsidering its opposition to the US$50 billion Asian Infrastructure Investment Bank (AIIB) after decisions by New Zealand and the United Kingdom to join.

Today Germany, France and Italy reportedly announced plans to also hop into the Chinese bandwagon

From the Guardian:

Gap widens between US and allies on new China-led lending body, with Britain among other countries already taking part in AIIB and Australia considering it

A senior US diplomat said it was up to individual countries to decide on joining a new China-led lending body, as media reports said France, Germany and Italy have agreed to follow Britain’s lead and join the Asian Infrastructure Investment Bank (AIIB).

A growing number of close allies were ignoring Washington’s pressure to stay out of the institution, the Financial Times reported, in a setback for US foreign policy.

In China the state-owned Xinhua news agency said South Korea, Switzerland and Luxembourg were also considering joining.

The Financial Times, quoting European officials, said the decision by the four countries to become members of the AIIB was a blow for Washington, which has questioned if the new bank will have high standards of governance and environmental and social safeguards.

The US dollar standard looks very much in jeopardy