The New Map: Energy, Climate, and the Clash of Nations

by Daniel Yergin

One of China’s great tools for achieving its goal of “connectivity” is its ability to mobilize capital on a massive scale. A new, wholly Chinese Silk Road Fund has been created with upwards of $60 billion. China also established a new Asia Infrastructure Investment Bank (AIIB) to finance developments along these corridors. This new institution reflects China’s dissatisfaction with what it considers its inadequate say in the “governance” of the World Bank, not commensurate with its standing in the world economy, and with the tendency toward “political correctness” in the World Bank’s lending (solar and wind, but no oil and gas extraction, and certainly no coal). The Obama administration wasted no time in opposing the creation of a new Chinese-dominated international financial institution. To Washington’s dismay, Britain rushed to be the first European country to sign on, beating out Luxembourg. Other stalwart U.S. allies hastened to join. All this left the United States and Japan as the odd men out. There’s no question who leads the AIIB: China subscribed 32 percent of the capital and has 30 percent of the voting rights. Yet at the same time, the biggest recipient of AIIB loans so far has been India.