ABSTRACT
This chapter argues that when the idea of creating the AIIB emerged, China was dissatisfied with its status deficit situation and was likely to opt for a power competing IFI. As the AIIB continued to evolve, China’s status deficit improved as its status improved in the international financial system as well as with the willingness of developed countries to join the AIIB. Constitutionally, the AIIB became a cooperative and reform-minded multilateral agency. After it started to operate since 2016, pessimistic perspectives of the AIIB were not supported by the evidence presented thus far. No strong evidence supports the claims the AIIB has been maneuvered in projecting China’s political and strategic ambitions. In seeking outside collaboration, the AIIB follows the lead of other major IFIs and is recognized as an important partner. Compared with the BRI, the AIIB appears to be less geopolitically sensitive.
