China's plans to set up the Asian International Investment Bank have demonstrated that the United States has lost its way and is rapidly forfeiting claims to global financial, economic, political and moral leadership. Questions also have to be asked about the wisdom and leadership of the World Bank and Asian Development Bank and about the chief Asian supporter of the U.S. — Japan.

From the moment the project was mooted, Washington's responses have been woeful, more or less wishfully hoping that the bank would go away. Even in mid-March, U.S. Treasury Secretary Jack Lew demonstrated his failure to understand the wisdom of that old adage if you are in a hole, stop digging. Lew urged European countries not to join the AIIB. He was too late: Germany, France, Italy and Luxembourg had already announced that were rejecting U.S. opposition and would join the United Kingdom in becoming founder members of AIIB before the March 31 deadline.

The weeks before Lew's comments, an unnamed senior U.S. official took the unusual step of talking to the Financial Times explicitly to condemn the U.K. for breaking ranks and announcing it was joining AIIB. "We are wary about a trend toward constant accommodation of China, which is not the best way to engage a rising power," grumbled the American official.