A Sino-Scottish Football Proposal

Readers of this blog will know of my interests (and soft spot) for all things Scotland. I previously wrote a brief ten-point approach to revitalising Scottish Football.

In the time that has elapsed since that article was written, we’ve seen a robust approach to football development in China. Now, football has always been popular in China but the attempts towards establishing China as a footballing powerhouse have been sporadic at best. However when President Xi Jinping became the President of the People’s Republic of China, it all changed.

president-xiIt has to be noted that President Xi is a huge football fan and he has publicly outlined his vision for China to one day host the World Cup and to then win it! In 2015, a 50-point plan was announced by the Central Planning Committee (of the Chinese Communist Party) to overhaul Chinese football and it was overseen by President Xi.

This desire for China to be a football giant isn’t a new one. The other Chinese leader in the past who had huge dreams for Chinese football was Deng Xiaoping, the architect for China’s economic liberalisation but his priorities had to be primarily on economic and social development.

Chinese football fans are a hugely passionate lot – I recall watching the Singapore Armed Forces FC (SAFFC) playing the Chinese Army Ba Yi team in 1998 at the old Kallang Stadium in Singapore and it was sellout turnout that was half Singaporean and half Chinese (despite the fact it was held in Singapore!) and the passion and energy was fantastic.

In fact, when Stockport County (from the Second Division) did a tour in China, their matches were attended by over 20,000 fans per game (more than five times their home average home attendance!).

The Chinese Football Association Strategy

The Chinese Football Association have clearly spelt out their desire and strategy to be a ‘world football superpower by the middle of the century.’

In an effort to match the strategy, they have embarked on a five-pronged approach towards delivering their vision.

1. Grassroots training, academies’ development and training

The Chinese investment into building the game at grassroots level is absolutely staggering. According to a memo sent out by the Ministry of Education in China on July 2015, they have identified 4,755 schools as specialist footballing academies.

Last year, the world’s largest (and arguably the most expensive) football academy – the Evergrande Football School – opened in Guangzhou, a Southern Chinese province. The school built in 10 months cost over $185 million. The school also has partnered with Real Madrid to provide the trainers and coaches to help develop about 3,000 young Chinese footballers.

Other football clubs, including Manchester City, and ex-players such as Luis Figo and Michael Owen have also established their football academies across China.

The Chinese government have also expressed a clear commitment to include football as part of the overall school curriculum.

This is part of the overall goal to ensure over 50 million children and adults play football regularly by 2020 and to develop the critical mass of high-quality players required to develop a world-class team.

2. Providing Chinese players with international experience and exposure

There have not been as many high-profile Chinese players in European leagues. The two most recognisable players were Sun Jihai and Li Tie who played for Manchester City and Everton respectively. Unlike South Korean and Japanese superstars (such as Park Ji Sung for Manchester United, Hideotoshi Nakata, Shunsuke Nakamura for Celtic, et et), Chinese players have not been able to shine at the top European leagues.

There is now concerted effort to get Chinese players playing in the top European leagues to get the international exposure. There is a reasonable expectation that this will not only allow for top players to develop their craft further but also help China in their international competitions.

It is to be noted though that Chinese players turning out for British teams saw over 350 million Chinese viewers becoming more interested in British football!

3. Ownership and partnerships with globally-renowned football clubs

The top Chinese companies are now investing, partnering or buying outright top teams across Europe. From Atletico Madrid to Inter Milan to Wolverhampton Wanderers, we see Chinese ownership. Chinese consortiums are also partners in other clubs such as Manchester City. This is part of a wider effort not only to drive economic benefits that come from effective management of football teams but to also learn and adopt best club management practices. These best practices will ultimately support better footballing management and establishment of world-class processes and procedures required to develop a football network back in China.

4. Bringing world-class managers and trainers to China

The top teams in the Chinese leagues are now bringing in expert football managers and coaches with very impressive pedigrees. The likes of Luis Felipe Scolari, Sven-Goran Erikkson and Dan Petrescu have come to Chinese leagues and have helped raise the level of the game in China.

5. Signing high-quality talent and superstars from overseas to play in Chinese leagues 

In the recent year we’ve seen the financial muscle of Chinese football clubs (supported by the richest Chinese companies and their billionaire owners, including Jack Ma of Alibaba fame and Wang Jianlin, owner of Dalian Wanda and China’s richest man) outbid top European clubs for the services of world-class footballers. From Ramires (£23 million), to Alex Teixera, to Hulk (for £47 million), to Carlos Tevez (being paid an estimated £20m per annum), we’re seeing a very deliberate policy of bringing the best players to China in an effort to drive up the overall quality of Chinese players in the Chinese League through better exposure to top talent.

What all of the above demonstrates is a clear laser-like focus on the Chinese government ambitions of winning the World Cup in the coming decades. We see the ambition being matched with money, political support and commitment from across all sectors (education, business and policy) – and this is just the start. 

One Area For Further Development

There is, however, one area which is still missing. Chinese players need to be playing against quality opposition week-in, week-out. Whilst the youth and grassroots development is a step in the right direction, it is going to take a decade or more before there is a crop of players who will provide the quality opposition. Having a few superstar players (limited to three foreign players per team in any event) again is not enough. Similarly, having a couple of world-class coaches is not going to be enough.

The Chinese league needs to have complete teams with quality players who can provide the Chinese players with the type of competition and exposure that will allow them to make step changes in their development and progress.

This is where Scottish football comes in!

What Could This Mean For Scottish Football?

The Scottish FA have provided for development loans to help build the youth football framework across Scottish football clubs. The Scottish FA have also provided financial incentives to Scottish football team for performance-based outcomes which include number of under-21 players in the first team.

Alistair Gray, in a BBC interview, also highlighted the quality of youth players from Scotland and the need for the players to have more competitive game time to further develop their capabilities.

The Proposal

My proposal is that the Chinese Football Association allow for the Celtic U23 and Rangers U23 participate in the Chinese Super League and increase the size of the league from 16 to 18 teams.

What would this mean for Chinese football and the players in the league?

  • It means that you will have the top Chinese teams playing against the cream of the crop from Scottish Football , against young players who are technically very competent.
  • It will also allow for Chinese teams to get used to the pace of football Scottish teams can provide and help build the overall footballing game intelligence for Chinese league players.
  • This will allow for a much more holistic development of Chinese players and get them acclimatised to playing against different styles and against much higher overall quality players.
  • It could also lead to a more formal exchange programme between Chinese league players and Scottish football clubs and also promote greater youth development through these exchange programmes.

There are significant benefits for Scottish football as a result of this proposal:

  • It will mean the top youth players from Scotland will have the opportunity to play against an up-and-coming group of Chinese players and further hone their skills.
  • It will also create greater interest in Scottish football by Chinese fans and will spur a greater following. It will help expose Chinese football fans to the intrigues and entertainment of Scottish football. The history of Scottish football, its lore and fables – from the Lions of Lisbon, to the history of the Old Firm derbies,   Archie Gemmill’s wonder goal against the Dutch in the 1978 World Cup. This will allow for the Scottish Professional Football League to negotiate better rates for the TV deal in China in the future. Imagine a world with a billion more interested Scottish football fans!
  • An Old Firm derby in Shanghai – the opportunity to recreate one of the world’s most historic football rivalries, creating an interest in the history and ethos of both Celtic and Rangers for an entirely new audience remains a very tantalising prospect.
  • It also provides a fabulous opportunity for Scottish youth to experience a year out in China, learning more about the culture and experiencing life from a different lens and perspective. This can only further build the bridges between cultures.

Ultimately this initiative will lead to greater awareness and relationships between both China and Scotland. It also becomes a fantastic opportunity for Scotland to showcase her natural beauty, the culture and traditions of Scotland and help increase the overall tourism and investment by Chinese.

It will also help the Chinese sports authorities get one step closer to meeting the Chinese leadership’s ambitions of one day winning the World Cup. Now, that’s an offer that will be hard to refuse.

 

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The Chinese Skynet!

You struggle to get around any board room meetings or conferences without the phrase “big data” being used like it is the panacea to all the woes businesses and the economy faces.

However, big data is equally relevant to governments, particularly, in light of Edward Snowden’s revelations.

I read a very interesting article a fortnight back on this very topic: http://www.bloomberg.com/news/articles/2016-03-03/china-tries-its-hand-at-pre-crime.

Essentially the Chinese government is looking to building a profiling tool that includes jobs, hobbies, consumption habits, along with details of any other unorthodox behaviour to detect potential/future subversive, criminal or terrorist behaviour.

What’s equally interesting from the article is that there has been, from Mao’s time, a secret file called the dangán, which has records about everyone, from details of their schools, personality assessments to health records, and can determine whether one gets that job promotion or government permit!

There is also a Chinese national network of surveillance cameras called Skynet!

The combination of this surveillance will allow for the Chinese government to analyse, interrogate and assess the data from her 1.2 billion citizens in order to detect future criminal, terrorist or subversive behaviour. However, the challenge that remains is how one can be prosecuted for ‘thoughtcrime’? At what point does the prosecution take place?

All in a very interesting legal and social conundrum!

 

 

 

 

 

The Triumvirate of Technology, Education and Employability – Solving the Policy Riddle

I has the privilege to speak at the ACCA Asia Pacific Future Education Summit in Beijing earlier this month (January 2016).

 

Slide1

During the course of my presentation I touched on the changing trends in learning, the impact of technology on learning and jobs and ACCA’s response to these global changes.

Below are my thoughts on this critical triumvirate of technology, education and employability and how it will help resolve some of our major policy issues and challenges of the day.

 

Slide3

Young people today are three times as likely as their parents to be out of work.

I have been considering this very urgent issue of employability and the growing ‘employability gap’: the fact that the skills students have as they leave our educational institutions aren’t meeting the expectations of employers, and that employers also want wider, softer skills as well as demonstration of knowledge and hard competencies.

It is also my view that technology is often woefully underexploited when it comes to giving students the opportunity to develop their professional skills.

 

Slide4

Globally 75 million young people are out of employment. The issue of employability is not one limited to a certain geography or country. Below are some of the main challenges across some of the major nations/regions of the world.

INDIA

According to a survey conducted by the Singapore Management University (SMU) in conjunction with Indian partners, it was felt that the employability of Indian graduates is low due to skill and geographical mismatch.

The survey also concluded that this gap can be bridged by digitisation of learning.

It is worth noting that the employability ratio of management graduates was only 15 per cent, engineering (20 per cent), law (14 per cent) and medical graduates (32 per cent).

JAPAN

An estimated 700,000 young people, known as hikikomori, have withdrawn from society and rarely leave home. These individuals have collectively withdrawn from the economic population of the country as a result of employability and the subsequent marginalisation.

EUROPE

Across the 28 countries of the European Union, unemployment among 15- to 24-year-olds was 22 percent in 2014/2015. The lack of prospects in the job market for young people is a serious problem in large parts of the EU. The highest unemployment rates are found in the south of Europe.Spain has the highest rate, with half of 15- to 24-year-olds out of work. In Portugal, Cyprus, Italy, Croatia and Greece a little more than one in three people in this age group are out of work.

CHINA

According to a study by McKinsey, the number of students graduating each year from university or vocational school has risen from 1 million a year in 2000 to 6.1 million in 2011. This stunning increase means that the number of new graduates exceeds demand for their services in many areas of the country, resulting in an unemployment rate of 16.4 percent for college graduates.

McKinsey also estimate that by 2020, Chinese employers will demand 142 million more high-skilled workers—those with university degrees or vocational training—or about 24 million more than the country will likely supply. Companies could fill this high-skilled labor gap with less-skilled workers, but this would result in productivity losses or poorer quality products and services. Other companies may leave roles unfilled, delaying the decision to grow or expand.

The study estimates that if China does not bridge this gap by 2020, the opportunity cost could reach some $250 billion (about 2.3 percent of GDP)—which is almost the same as that of Singapore or Malaysia’s GDP! That’s a very large amount of money to put at risk – not to mention the impact on social welfare and harmony.

Slide5

There are a few reasons as to why this employability gap exists.

The first reason is a difference in what employers want from graduates and what they are getting. Surveys of employers consistently show that they are not satisfied with the skill levels of their new tertiary hires, whether these are graduates of universities or vocational schools. The main complaints, according to McKinsey research (and a wealth of anecdotal evidence), are lack of technical training, inadequate English, and deficient soft skills, such as the ability to work in teams, critical thinking, and innovative flair. For instance in China, in 2013, more than a third of employers in China surveyed said they struggled to recruit skilled workers, with 61 percent of these companies attributing this to a shortage of general employability skills.

A second mismatch has to do with the knowledge requirements of the future and the structural makeup of the workforce. As countries’ evolve their underlying economic models, their labour needs shift as well and the resultant demand for higher skilled talent is not met by the status-quo educational systems.

Thirdly is one of a geographic mismatch. There are instances where the universities in certain countries tend to be concentrated in an area and this leads to a distribution problem as there are other areas where there are not enough universities to support the demand.

There is also a large question about how the education and training system also operates in. In a number of countries, there is growing concern—among parents, employers, and policymakers alike—that the system’s emphasis on rote learning and focus solely on exam performance does not foster the mental agility and innovative flair that the modern work place requires.

Slide6

Therefore as you see, employability is a very real and serious issue that has serious economic and social consequences.

But before we proceed, it may be useful to have a brief view of what we mean by employability skills.

I have here a list which is not meant to be exhaustive but provides a flavour for some of the skill sets and capabilities we need to consider when talking about employability.

  1. Communication skills that contribute to productive and harmonious relations between employees and customers.
  2. Team work skills that contribute to productive working relationships and outcomes both within teams, the organisation and with external parties.
  3. Problem-solving skills that contribute to productive outcomes and with a commitment to finding solutions.
  4. Initiative and enterprise skills that contribute to innovative outcomes and driving stronger business performance
  5. Planning and organising skills that contribute to long-term and short-term strategic planning and building the processes to achieve desired outcomes
  6. Self-management skills that contribute to employee satisfaction and growth and ensuring they contribute to their organisation’s well-being in the process.
  7. Learning skills that contribute to ongoing development.
  8. Technology skills that the modern workplace requires.

Slide7

Institutions and organisations tackle student employability in a number of ways, including through for example through professional experience requirements,  and employability modules, careers services, work-placements and experiences, work-based mentors, volunteering and increasingly through looking at employability awards. We know there is already some excellent practice, particularly in vocational and professional disciplines where notions of ‘what it is to be professional’ are embedded in the curriculum, but for others this is less apparent. Few use technology really effectively in an integrated way to support student employability, although some are exploring this.

There is evidence of an ‘employability gap’ in the skills that students are actually starting with on day one of employment and the skills that employers are expecting from them. However, there is an increasing appreciation that ’technology for employability’ can provide many potential benefits to students, institutions and employers

Digitally savvy graduates are essential for shaping tomorrow’s entrepreneurial activities, but digital literacies aren’t well articulated.

Slide8

The nature of knowledge is changing and, in this digital age, our definition of basic literacy urgently needs expanding. The notion of digital literacy – those capabilities that equip an individual for living, learning and working in a digital society – is one that needs to be taken seriously by education providers and consider how it can be an enabler for employability.

Technology acts as an enabler in supporting employability in the following ways:

  • ensuring that opportunities are provided throughout the curriculum in a scaffolded and supported way for learners to reflect, plan, and articulate and showcase their knowledge and skills in an integrated way
  • embedding digital literacy skills more broadly across the learning
  • ensuring that assessments and learning are ‘authentic’, and more closely aligned to the workplace and real-world tasks
  • using a principles-based approach to change which places the importance of developing self-aware, independent learners (which some argue is the main purpose of education at the heart of institutional strategy, policy and practice
  • Supporting tutors through better management tools to help their students. By using technology as a tool for learner management, teachers can develop and execute individual learning plans and track the progress being made by the learner in relation to the employability skills.
  • empowering students as agents of change, which evidence shows benefits all stakeholders including students in the development of wider employability skills. Students and learners can also document their employability skills and self-assessment notes as evidence of their competency and knowledge levels.

We know however that although there is a lot of excellent practice, it is not widespread. Technology can support all of the aims above, but further work is needed to ensure that good practice is shared and teams dedicated to developing learners are supported in maximising opportunities offered by technology, and in exploring how existing employability opportunities can harness technology to best effect.

Slide9

According to research conducted by Cleary, Flynn and Thomasson (2006), it is recommended that for effective employability skills development; the design of an overall active teaching and learning and assessment strategy adheres to the following four adult learning principles:

  1. Responsible learning – learners take responsibility for their learning. Responsible learning emphasises self-management and initiative and enterprise as learners work independently to develop new knowledge and activities in the interest of furthering their skills.”
  2. Experiential learning – learners learn from experience. This “emphasises ‘learning to do’ and ‘learning from doing’. Authentic learning occurs when learners have an opportunity to apply their skills and knowledge in authentic work environments or in contexts which attempt to simulate the real.
  3. Cooperative learning – learners learn with and through others. This form of learning “encourages learners to learn from each other, share learning tasks and learn from a range of people including colleagues, mentors, coaches, supervisors, trainers, and others.
  1. Reflective learning – learners reflect on and learn from their experience. This can be introspective, where learners are encouraged to examine changes in their own perceptions, goals, confidences and motivations. It addresses: developing critical thinking skills, learning to learn and developing attitudes that promote lifelong learning. Reflective learning can be useful in directly addressing problem solving, initiative and enterprise and self-management skills

Digital or e-learning can foster these four types of learning and the development of all of the employability skills.

Slide10

Universities and colleges have a responsibility to develop students into individuals who can thrive in an era of digital information and communication – those who are digitally literate are more likely to be economically secure and these skills are especially important in higher education given that graduate white collar jobs are almost entirely performed on computers and portable devices.

But it’s not just about employability – increasingly digital literacy is vital for learning itself. Digital tools such as virtual learning environments, e-portfolios and social networking software for peer mentoring are now common within further and higher education and students without the skills to navigate them risk suffering an inferior student experience at best, and being left completely behind at worst. It goes beyond IT skills, a complete culture change is required to live fully within the modern digital society, from understanding how to communicate ideas effectively in a range of media to managing digital reputation and history.

Slide19

There are a number of success factors that will be critical as organisations consider an effective use of digital learning to support employability of their students.

They include the following and it is worth bearing in mind that this is an iterative and progressive process which will in turn drive better outcomes.

CONCEPT AND ROLE

  1. Develop the employability skills based on a strategic and structured approach that links the employability skills to each other
  2. Recognise the value of the employability skills in all aspects of life in addition to their employability role, and include recognition of prior developments in these skills in learning and assessment strategies.

PEDAGOGICIAL ASPECTS

  1. Use e-learning in blended learning strategies to cater for a range of learning styles and encourage individualised, self-directed learning.
  2. Adopt active learning strategies such as role plays, real work and simulated work environments, and incorporate e-learning.
  3. Recognise the centrality of learning skills as the foundation for addressing all of the other employability skills.
  4. Break the learning skills into four types: responsible; experiential; cooperative; and reflective learning.
  5. Implement an upfront induction/orientation program to develop awareness and understanding of the employability skills and the e-learning role using a conceptual structure that shows the linkages between these skills.
  6. Link remedial education for basic skills, such as literacy, and development of the employability skills in integrated strategies that harness e-learning.

ASSESSMENT AND REPORTING

  1. Use e-portfolios as a tool for student reflective learning as well as a tool for reporting and assessing learner progress in the employability skills.
  2. Pay attention to the different levels of application and performance of the learners and aid them through the journey,

MANAGEMENT ASPECTS

  1. Use a technology-based learning management system to support individual learning plans, tracking of learner progress and achievement, and the efficient use of teaching resources.
  2. Adopt whole of institution strategies, effectively coordinated and supported by staff development activities in both employability skills and e-learning and particularly e-learning facilitation skills to enhance cooperative learning opportunities.

KEY AREAS FOR FURTHER DEVELOPMENT

  1. Recognise that further innovations and improvements will be required to further strengthen the education framework and support learners and students.

Slide20

There are some efforts we can do to help bridge the employability gap.

We need to make a better case for using technology to develop employability. We need to raise digital aspirations of employers, universities, learning partners and professional bodies such as ACCA and develop students as ‘digital entrepreneurs’ that can go on to act as agents of change for business. Digital literacy often isn’t related to employability skills, and we need to see this change to make a clear link.

We need to work in partnership with employers to understand needs better

We must not forget about those youth that are outside the formal education system, or are otherwise marginalized due to disabilities or their gender. Many youth are employed in the informal sector, and may not be able to access traditional schooling or have access to schools in their regiosn. Offering alternative, non-formal models of relevant education are crucial.

Without these strategies, there is a risk that students leave university or college equipped with the right qualifications for their chosen career but without the tools and understanding they need to thrive in the connected, globalised digital world of today.

Slide21

Overall, I would like to conclude that digital learning and the employability skills should be seen as two of the dynamic influences whose interaction is likely to have a significant impact on shaping the evolving approach to l education and training now and into the future. There is much work to be done but finding effective solutions in this closely interlinked areas of technology, education and employability will help resolve some of the major economic and social issues of our time.

What the Asian Infrastructure Development Bank means for Asia and the world

Almost exactly a year ago, just prior to the Asia Pacific Economic Co-operation (APEC) hosted in Bali in October 2013, President Xi Jinping announced the proposal for the establishment of the Asian Infrastructure Investment Bank (AIIB). This was a major announcement which was unforeseen and unexpected particularly as no clear plans were outlined at the time.

Since the announcement however, Chinese officials have been very busy in encouraging other fellow Asian partners to be the initial founding partners of the AIIB.

To date, the Chinese Ministry of Finance has convinced over 22 Asian partners including the likes of Singapore and Bangladesh to confirm their participation as founding partners and contribute to the initial funding capital.

Other major partners such India, Qatar and Saudi Arabia have been very bullish about the prospects and the promise of the AIIB and have made very positive overtures publicly about their participation as founding members. Other South East Asia partners such as Thailand and Malaysia remain positive and other major partners such as South Korea and Australia are still studying the Chinese proposals.

 

The Asian Investment Infrastructure Bank

The role and rationale for the AIIB

The mandate of the AIIB, as a multilateral development institution, is to support the financing of infrastructure developments across Asia that supports economic growth and activity nationally and regionally.

Traditionally Asian nations have turned to the Asian Development Bank (ADB), the International Monetary Fund (IMF)  and the World Bank for financial support. However, the level of financial assistance, particularly from the World Bank and the IMF have dropped since the 2008 financial crisis.

The ADB is also being increasingly viewed as a bureaucratic entity which takes almost seven years to launch a project or initiative (from proposal to the approval of funding) which leads to significant delays due to red-tape.

These conditions do not support the urgent need for infrastructure investment by a number of Asian economies. The ADB estimates that Asia needs about US$8 trillion of physical infrastructure investment between 2012 and 2020. The OECD estimates that globally over US$50 trillion of infrastructure investment is required over the next two decades to support sustained economic activity.

The AIIB is expected to have an initial capital of between US$50 billion to US$100 billion with China contributing to half that amount. This will immediately create an entity that is stronger than the Asian Development Bank (which has a current capitalisation of about US$78 billion) and will be around half of the World Bank’s current capitalisation of between US$180 billion to US$200 billion.

 

Implications and impact for major Asian partners

The creation of the AIIB has a number of major implications for Asian economies. Growth prospects With depressed growth prospects – strong investment in infrastructure projects will support the creation of demand and improve production and consumption. The enhanced infrastructure will also support greater trade and economic expansion.

This is certainly the case for India which forecasted a need for approximately US$1 trillion to meet infrastructure requirements under its 12th five-year plan (from 2012 to 2017) but is struggling to meet the investment target. Participation in the AIIB will allow for India to raise greater capital and visibility for some of her public-private infrastructure initiatives. The rest of the South Asian subcontinent, including Sri Lanka, Bangladesh, Nepal and Pakistan have all either signed up with the AIIB or shown strong interest in the initiative. If India chooses to remain on the side lines, her influence across South Asia will further diminish. The AIIB will be a strong platform for India to take on a regional leadership role and be seen to be a partner for the region’s growth and success.

The AIIB will also certainly support a number of smaller Asian economies which have been unable to meet the stringent requirements or payment terms set out by the likes of the Asian Development Bank or the World Bank. This includes the likes of Nepal, Cambodia and Laos.

From a political perspective, the impact for Japan as a result of these developments is significant. The Asian Development Bank has traditionally been led by Japan (who along with the US share the majority voting rights in the ADB) which previously allowed Japan to exert her political and economic influence across Asia. The AIIB will certainly curtail Japan’s political influence across Asia and also strengthen China’s hand in the on-going disputes ranging from the South China Sea territorial issues to legacy World War II disputes.

South Korea on the other hand is trying to navigate its participation in the AIIB tenderly. On one side, Seoul has to please her largest trading partner, China, whom she is working closely with towards greater economic success. On the other side, Seoul’s traditional security partner, the US, remains a critical partner in South Korea’s regional defence strategy.

ASEAN (Association of Southeast Asian Nations) has certainly shown significant support for the AIIB. Indeed Singapore was one of the early founding members of the AIIB as they have a clear stated policy of working with China from the inside rather than remaining out on the side lines looking in. Other major ASEAN economies such as Thailand, Malaysia and Indonesia are likely to sign up to the AIIB to exert greater influence in the way the bank is run and managed which will in turn support their own investment and growth plans. However, there will be concerns, particularly from Philippines and Vietnam, which in recent times have had strong and sharp exchanges with China over the South China Sea islands. Their concern will be that should China take a greater role in economic influencing and funding, it will strengthen China’s hand and erode Vietnam and Philippines’ support in their respective claims in the South China Sea.

Asia has always traditionally had strong savings, currently estimated to be worth over US$3.99 trillion. This supply of savings can meet some of the immediate infrastructure requirements across Asia but there is a mismatch in channelling these savings towards the financing of the infrastructure projects. The AIIB can help resolve this funding gap moving forward.

 

Problems with Uncle Sam?

The US government has not hidden their opposition to the establishment of the AIIB.

Their biggest concerns are around how China will use the AIIB to further project her economic and political dominance across the region. It also gives greater clout to other major Asian partners such as South Korea and India whilst diminishing the influence of the United States’ traditional Asian partner, Japan (who leads the ADB as highlighted above). This does alter the geopolitical realities in the region and softens the US hegemony in the region.

Some of the other concerns highlighted by the US government is that the new bank will not have adequate and robust safeguards in areas such as environmental protection, human rights and a transparent procurement process which will undermine the need for good governance across the region. Indeed, if the AIIB fails to have strong safeguards, it will exacerbate the challenges of corruption, lack of accountability and proper due diligence which have remained endemic problems across Asia (and also around the world). However, it is likely that the AIIB will operate to very high and rigorous global standards when assessing and evaluating projects.

However, it must be noted that China has made it clear from the outset, and also recently at the Boao Forum for Asia, that they welcome the participation of the US and other European Union partners in the AIIB. This will provide an opportunity for non-Asian partners to support the bank and ensure that AIIB’s governance and strategy is in line with global standards.

The US should use this as an opportunity to partake in the region’s continued growth and stability. US participation in the AIIB (which will be subject to lengthy Congressional debates) will certainly do more to support US foreign policy of a safer and prosperous world rather than the current position of dissuading potential partners from participating in the AIIB.

 

The future

The AIIB will need to create strong and close collaborative partnerships with the likes of the World Bank and the ADB so that they are not working to cross purposes. Encouragingly, the World Bank have announced their wish to work closely with the AIIB when they launched the Global Infrastructure Fund (GIF) earlier in October 2014. Similarly, the ADB have also announced their intentions to work closely with the AIIB.

The AIIB will also need to create a viable and sustainable business model which channels funding appropriately towards infrastructure investment.

Recently, the BRICS Bank or the New Development Bank was set up by Brazil, Russia, India, China and South Africa. The BRICS Bank is headquartered in Shanghai and the Presidency is maintained by India for the initial five years. However, the funding from this BRICS bank is only available to the BRICS nations and not to the rest of Asia. The AIIB helps to alleviate this issue.

The AIIB can potentially create a platform that generates economic ties and greater unity across Asia. It provides a strong and credible opportunity for major Asian rivals to become partners towards growth and development. Initiatives such as these will help to provide resolution to tricky issues that always emerge between partners and friends.