The surge of nations agreeing to participate in China’s new development bank — the Asian Infrastructure Investment Bank — marks a stunning success for Beijing, which has overcome U.S. opposition and arm-twisting to lure key American allies.

Washington has been at its petulant worst, with unnamed officials accusing London of “constant accommodation,” implying parallels with former British Prime Minister Neville Chamberlain’s appeasement policy toward Hitler that obviously ended in disaster. These anonymous sources also expressed dismay that the U.K. and fellow EU nations were opportunistically jumping on board because greed trumped principle. Shocking stuff!

And with, India, New Zealand, Australia, South Korea and the Association of Southeast Asian Nations on board, the U.S. has managed to isolate itself. Who would have thought that these uppity ingrates would pursue their own economic interests rather than join Washington’s altruistic crusade to save Asia from Chinese-built infrastructure that is, according to African recipients, shoddy and crumbling? Emphasizing that angle might be a better ploy, but the U.S. has harped on about transparency and governance in its crusade against China’s initiative to institutionalize its growing economic penetration of the region.

Problematically, everyone sees through this threadbare cover for Washington’s real anxieties. Rhetorical fog aside, the nub of the problem with the AIIB is that the U.S. simply sees this as a challenge to its hegemony in the Asia-Pacific region and worries that China will gain influence at Washington’s expense. Tokyo agrees.

This is already happening and the AIIB has come to symbolize America’s nightmare: The need to collaborate — definitely not accommodate — with China as equals. Geopolitically, as China proceeds to sew up Asia with its financing, trade and infrastructure projects, the U.S. is confronting a reality check: It is powerless to stem the inexorable Sino juggernaut as it translates economic clout into political influence.

The good news here is that China could do this on its own through bilateral deals, but it is choosing an inclusive multilateral approach and the scrutiny and transparency that this involves.

Why would anyone seriously oppose China’s initiative, given the region’s inadequate infrastructure and seemingly limitless needs? These greatly exceed the capacity of the International Monetary Fund, World Bank and Asian Development Bank, the U.S.- and Japan-dominated international financial institutions that have significantly shaped Asian development since the middle of the 20th century.

One needs a very short memory to imagine Washington or Tokyo lecturing Beijing on sustainability, governance and transparency, given that criticism of these institutions over the decades has focused exactly on these problems, propelling significant reform efforts that remain unfinished business. They should also be modest about their achievements given a rather checkered track record in promoting development and raising standards of living.

These international financial institutions were at one time agents of the “Washington Consensus,” a set of “one-size-fits-all” market fundamentalist prescriptions foisted upon governments facing economic crisis that are now largely discredited. It is also unseemly that Washington lambastes China’s no-questions-asked support for nasty leaders who provide what Beijing wants. U.S. support for kleptocracies in Asia such as former Philippine President Ferdinand Marcos and former Indonesian President Suharto — along with a rogues’ gallery of tyrants in every continent — exposes this blatant hypocrisy.

There have been monumental mistakes, including the tube-wells pumping arsenic-tainted groundwater in Bangladesh courtesy of the World Bank, an institution that at one time funded grandiose dam projects it now disavows as destructive and overly disruptive to local communities.

The case for Japan, Washington and other interested parties joining the AIIB is to share these lessons learned, mistakes made and reforms undertaken to ensure that it benefits from this experience. It also won’t hurt that national firms might make wheelbarrows of cash from “doing good,” the ostensible if not elusive aim of such development projects.

The AIIB represents a golden opportunity for collaboration that will help improve the impact of its programs on regional development. It is therefore welcome news that the IMF and World Bank recently signaled cooperation.

Not joining is based on wrongheaded zero-sum thinking — namely, that to the extent that China exercises leadership, it will diminish and undermine the U.S. and Japan. I don’t think for a minute that the main reason why the U.K. and the other “appeasers” in the democratic capitalist camp are joining the AIIB is to promote good governance and transparency, but their participation will do so anyway. For recipients of AIIB funding, participation of these countries and existing international financial institutions increases the chances that the best practices will be adopted or, at least, not ignored.

Beijing wants the AIIB to be a success, not a black eye, mindful of how international financial institutions tend to attract sharp criticism. It should be worried about the potential for a backlash, as happened with the IMF during the Asian financial crisis that swept through the region in 1997-98. The austerity package imposed on Indonesia translated into protests in Jakarta as demonstrators held aloft signs translating the acronym as “I M Fired.” The iconic image from that time was then-IMF Managing Director Michel Camdessus looking down imperiously at Suharto as he signed the bailout agreement, reinforcing perceptions that the “have-not” nations were still under the thumb of the nations holding the purse strings.

Washington has really dropped the ball on the AIIB, reinforcing perceptions that it is a nation in decline because it can’t get its closest allies, with the exception of Japan, to join its quixotic effort to stymie the inevitable rise of China in Asia. Even Japan is having second thoughts, as indicated by Finance Minister Taro Aso’s recent comments.

The AIIB was not a fight worth picking, let alone one that had any chance of succeeding, so why would Uncle Sam stick its neck out only to get a pie in the face? In recent years, China has made it clear that it wanted to have more influence in the IMF, World Bank and Asian Development Bank, but Washington wouldn’t play ball even as it called for Beijing to exercise more leadership.

In retrospect, it was a bad call. It was inevitable that even if China assumed a more influential role in these institutional legacies of the Bretton Woods international financial system, it also wanted to institutionalize its power in a new Asian order based on Beijing’s rules.

Washington may prefer China to abide by the U.S.-designed post-1945 order — one that has cemented its interests — but it would be far better off swallowing its pride and jumping on board the AIIB and working with China. Tokyo should too.

Jeff Kingston is the director of Asian Studies, Temple University Japan.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.