The establishment of the China-led Asian Infrastructure Investment Bank (AIIB), viewed as the developing countries’ answer to the West-dominated World Bank, has reopened Taiwan’s existential crisis and triggered an emotional wave in this prosperous island nation, which China still claims to be part of its territory.
China stalled Taiwan’s attempt to become one of the founding members of AIIB by keeping its application pending because of the 66-year-old dispute over Taiwan’s official name. China apparently insists that Taiwan enter the bank under the name “Taipei, China”, but not as Republic of China (ROC) as Taiwan officially calls itself, or as “Chinese Taipei” an alternative name suggested by Taiwanese President Ma Ying-jeou when he proposed his country’s membership in AIIB. China has the largest stake of $ 29.78 billion in the bank’s authorized capital of $ 100 billion and a voting right of 26.06 per cent (India, the second largest stakeholder, will have 7.51 per cent votes). This gives China the right to decide what the bank will do and won’t do. On Monday (JUNE 29), at a meeting in Beijing, delegates of 50 nations from five continents signed the bank’s articles of agreement. The US, which views the bank as a threat to its clout has stayed off while many of its allies have joined the multilateral development institution. The AIIB, an idea floated by Chinese President Xi Jinping some two years ago, will start functioning in a few months, with its base in Beijing.
Taiwan, an advanced industrial nation and an Asian economic power, is keen to join the bank, China has let it down. China doesn’t consider Taiwan as a sovereign nation and likes the world to view the island as part of its geography. China allegedly included the condition in the articles of agreement that a member should be `a sovereign’ nation and that it should be `responsible for the conduct of its international relations’ with a view to not let Taiwan join as an independent nation.
Taiwan broke off from mainland China (People’s Republic of China or PRC) following the civil war between Mao’s Communist Party and the Kuomintang nationalist party and Chiang Kai-shek set up the Republic of China (ROC) on the island in 1949. Though they are two independent nation-States of the Chinese race, the ROC’s constitution says it has sovereignty over the PRC while the PRC, even after 66 years, still considers Taiwan as part of its territory and aims to retake it eventually. Taiwan, which took to capitalism, turned out to be an Asian Tiger by the turn of the century. Though the people-to-people relationships and trade have grown enormously between the two countries, China’s emergence as a global power has created a nagging suspicion in a section of the Taiwanese politicians that their country might one day go the Hong Kong way.
It’s against this backdrop that China `slighted’ Taiwan’s political existence and `degraded’ its international status while setting up AIIB. The Chinese government’s Taiwan Affairs Office has said Taiwan could apply to join the bank “under the appropriate name,” hinting that Taiwan’s name in the application should not suggest that it is a sovereign country! The appropriate name obviously is `Taipei, China’ which incidentally is Taiwan’s name in Asian Development Bank too.
On June 30, a day after the AIIB constitution was ratified in Beijing, Taiwan’s Ministry of Finance said that the country would rather not join the bank if its national sovereignty would be compromised by doing so. Deputy Finance Minister Wu Tang-Chieh asserted that Taiwan wanted to join the bank `in a dignified and equal way.’ The opposition Democratic Progressive Party said that the membership rule was “apparently aimed at downgrading Taiwan’s international status.”
The setting up of AIIB is clearly a major milestone in China’s quest for global clout. It will also give China access to Europe’s market as a substantial chunk of the bank’s funds is expected to be used for building the multi-nation New Silk Route that will link China to Europe through many Asian countries.