Why create another development bank? China and the Asian Infrastructure Investment Bank

In 2013 Chinese President Xi Jinping first proposed creating a new Chinese-led development bank to focus on infrastructure development. While many were suspicious about China's intentions it is now evident that the AIIB is an extraordinary development in global governance, as China's first major foray into leading an international organization with global membership that may serve as a showcase for its multilateral leadership. This paper examines the factors behind the AIIB's birth. It argues that three strategic factors created a window of opportunity to create a new bank. These include Xi's desire to turned China into a more outward-looking, actively rising global power; the huge unmet need for infrastructure in Asia; and China's frustration with its inability to gain a larger voice in major international organizations. While the AIIB's birth reflects in part China's unhappiness with the institutional character of the liberal order, the AIIB fits within it, and is not an institution that challenges it.