China-led infrastructure bank - ‘indication of de-dollarization that makes US unhappy’

China's President Xi Jinping (front row 8th R) meets with the guests at the Asian Infrastructure Investment Bank launch ceremony at the Great Hall of the People in Beijing (Reuters / Takaki Yajima)
The US was forced to change its mind over cooperating with the China-led development bank after its allies refused to join a boycott, which is a sign that dollar hegemony is not lasting, Lew Rockwell, chairman of the Ludwig von Mises Institute told RT.

The US intends to cooperate with a new global development fund spearheaded by China. The Asian Infrastructure Investment Bank was established last year and is aimed to support the development of Asian economies. Six European countries including Germany have already signed up. The China-led bank will have an initial fund of $50 billion dollars which is expected to double.

READ MORE: Support of China’s development bank is ‘gigantic concession’ by US

RT:The US is now willing to work with the China-led Asian Infrastructure Investment Bank, through the IMF and World Bank. Why has Washington changed its mind?

Lew Rockwell: Because they were forced to, because so many US allies were not going along with their demand that everybody boycott the bank. It is just another indication of the increasing de-dollarization of the world economy which of course makes the US very unhappy. As we know the US responded to all of this by shooting off Minuteman IIImissile that could carry five nuclear warheads and saying [that] the whole world should realize that the US can target with this sort of horrendous weapon any place on the planet.

That wasn’t long after Saddam Hussein discussed Iraq going to a gold standard that the US went to war against him; same with Libya. The US doesn’t like anybody doing anything outside of the dollar hegemony. But the dollar hegemony isn’t lasting. And I think that this Chinese bank – even though I’m not a big fan of these sorts of institutions in general because it is a competition for the World Bank and the IMF which are Washington DC based institutions controlled by the US - is a very good thing because we don’t want a world government. Decentralization is always much better for human freedom and human flourishing. The idea of having world hegemony, world government running everything which has been US’s ambition since at least WWII is a very frightening and awful thing.

This is a small step but it is a very good step that this bank is coming to existence against the US’s explicit wishes and all kinds of private blackmailing, I’m told, as well and to try to keep other countries going along with that - it didn’t work. It is quite a wonderful thing that this is happening, and they must be grinding their teeth in the State Department, but it is good for the world. It’s good for Americans too, by the way. It is not good for the American people to have the US government lead the world government either because it treats us all like colonists and peons just like it does in the rest of the world.

RT:Countries like the US and Japan worry that China is using this institution to extend its influence in the region. What exactly are Beijing's goals here?

LR: I think China after the horrendous period of Mao’s communism, all the starvation, all the unbelievable poverty and oppression, concentration camps, and so forth, is coming into the sun. With the capitalist economy, much more freedom, they are becoming much more powerful economically- that is a good thing. In America we love getting Chinese goods: the prices are right, the quality is great. This is true all over the world. So why not celebrate this unbelievable, magnificent step in human freedom out of the darkness of communism into the light of at least pretty much capitalism. It’s not a free market but it’s much, much freer than it used to be.

AFP Photo / Saul Loeb

But this is typical unfortunately in history when you have a declining empire, like the US Empire, it gets very, very upset about a rising power like China. Because Japan is also in decline. Japan and the US are upset… I remember once when the US official said [that] they wanted to prevent China from having influence in the South China Sea. It is like China saying “We want to prevent the US from having influence in the Gulf of Mexico.” Good luck with that! So I think these are very good developments. It’s unfortunate that Japan is going along with the US, but of course the US militarily occupies Japan. It’s got all kinds of nuclear weapons in Japan, all kinds of troops, planes, and ships. Japan I guess feels they have to go along.

But this sort of structure is coming to an end. I think we’re not going to have world government anymore; we are not going to have the power able to exert its influence all over the world like the US, its military influence. Chinese influence tends to be economic influence. That is all to the good. Let us have more China-made goods, more great prices, let all the world trade together. Then we will have much less chance of this horrendous wars that the US is engaging in all the time and threatening even worse stuff against Russia, against China - the only two major powers in the World that are not controlled by the US.

RT:There's already the Asian Development Bank that aims to facilitate economic development of Asian countries. Why do we need another bank for that?

LR: The current Asian Development Bank is just a subsidiary of the US government that is why there is a need for another one. Although, again, I don’t think government in so-called investment of this sort is actually a good thing for the world. But given that these things exist its better that they be decentralized; they are not just be one, better that there would be many. The Asian Development Bank is just the Obama bank, the John Kerry bank; it’s the Goldman Sachs bank, and so forth. That is all American, Wall Street and US government institution. It is a good idea to have something separate. I know that is a very strange idea to have Asian Development Bank controlled by Asians- that is kind of, you know, a crazy idea. But for some reason the Chinese would like to have that happen.

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The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.