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Canada should join China-led bank, AIIB

Editor: Li Kun 丨CCTV.com

06-13-2016 11:16 BJT

By Christina Kitova, associate partner Hodges Media Communications, based in Markham Ontario Canada

The Asian Infrastructure Investment Bank (AIIB) was established on December 25, 2015. The agreement was signed by representatives from 21 different Asian nations. Presently, there are 60 nation members of the AIIB, hailing from all over the world. The bank will finance projects, such as loans to finance infrastructure in the more impoverished regions of Asia.

The creation of the AIIB also gives China greater influence in regard to the International Monetary Fund (IMF). The AIIB offers a strong presence that will encourage multilateral organizations to act more green, efficient and effective, providing a competitive angle that demonstrates AIIB's advantages.
 
The AIIB offers secure assets to institutional investors, such as issuing long-dated bonds that will provide a measurable return on funding infrastructure.
 
China-led bank will expand its influence, making it advantageous decision for Canada to join in, since it will provide opportunities for Canada to be a stand alone nation without being overly-influenced by the U.S. and Japan.

A rebalancing of the global economy has been underway, which offers a great opportunity for Canada to embark on a more diversified portfolio as the nation seeks more trade partnerships with China on the federal and provincial levels.

The Premier of Ontario Kathleen Wynne has explained that the AIIB could generate much needed revenue for Ontario and create symbiotic business partnerships.

On the federal level, trade with China is estimated at $170 billion (CD) per year. China also holds over $4 trillion (USD) in foreign reserves. The Chinese currency, yuan is Canada's second most common financial trade currency.
 
Thus far Britain, Germany, France and Italy have already joined the venture recognizing its benefits. The European G7 membership does trust the stability of China’s economy. It makes logical sense as China is rallying to have the new world reserve currency.

There's greater demand for the Chinese yuan with a drive to have yuan included within the International Monetary Fund's Special Drawing Rights, which will officially start later this year.

The trade in yuan has risen from being a marginal 1% to its present 25% trade standing within the last two years and it is projected to accelerate further.  There have been clearing centers set up offshore around the world. Russia, United Kingdom and Australia have already signed currency swap agreements.
 
BRICS (Brazil, Russia, India,China and South Africa) bank is also working with the AIIB on future projects. Canada joining the AIIB can provide better trading opportunities, as well as trade with BRICS countries. The World Bank has expressed an interest in working with the AIIB to eradicate poverty.
 
AIIB benefits fill the need for more development and the differentiation is what the World Bank specializes in to provide support for developing countries. The AIIB can spur stronger development of infrastructure in Asia, including the One Belt One Roadinitiative.

The policy would play a vital road for global trade development. The opportunities for Canada are endless, while also providing trade opportunities with other Asian nations and Russia, since the AIIB could transform economies across Asia that create more business opportunities and to diversify trade portfolios for multiple investing nations.  

The upgrade of free market trade could ease the transport of goods through borders by sea as well as across land, expanding export and import and efficiency.
 
Canada stands only to gain by joining the AIIB as it has a positive effect upon its economy. It's the right move for Canada to join the AIIB, despite opposition from Washington.

Christina Kitova, associate partner Hodges Media Communications, based in Markham Ontario Canada

 

( The opinions expressed here do not necessarily reflect the opinions of Panview or CCTV.com. )

 

 

Panview offers a new window of understanding the world as well as China through the views, opinions, and analysis of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

Panview offers an alternative angle on China and the rest of the world through the analyses and opinions of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

 

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