European nations to join China-led bank groundbreaking

Germany, Italy and France have all agreed to follow Britain in joining the China-led international development bank - Asian Infrastructure Investment Bank (AIIB) regardless of US pressure on these countries not to join. The implication of their decision to join the financial institution is groundbreaking.

European countries are still facing tough economic climates even though the global market is gradually recovering. Recently, the European common currency - Euro - has plummeted to its lowest level in dollar price since its introduction. The uncertainly of Europe's economic stability is under the scrutiny of international investors as well as financial and economic analysts.

More growth opportunities need to be created to feed this enormous economic empire within and outside Europe.

"Joining the AIIB at the founding stage will create an unrivalled opportunity for the UK and Asia to invest and grow together," George Osborne, Britain's Finance Minister, said last week. Economic interests have overshadowed the political interests of these European giants even though they need to take different approach to what has been suggested by long-term strategic ally - US.

Europe is at its crucial historical moment of moving forward as a giant economic flagship with all member states as a whole. There are many factors that will determine whether UK, Germany, Italy and France can secure big shares of the world's fastest growing markets, high level of corporation with Asian partners, especially China, and lower barrier in their participation in the Asian market are vitally important out of those factors.

Strong ties with China will reduce the political risk in their investment in Asian markets. High level of participation will guarantee a handsome return to their investment.

UK, Germany, Italy and France have joined AIIB when the quality of governance is not clear. This further indicates their huge interests and absolute confidence in Asian markets, especially the Chinese market.

Despite bright economic outlooks in the world's fastest growing markets, China, India, and other Southeast Asian countries are suffering from underdeveloped infrastructure. The infrastructure market alone is not only huge but also is an opportunity may last for few decades.

Membership of UK, Germany, Italy, France and other countries such as Australia and South Korea will definitely help to define a high standard of governance of AIIB and realize its implementation. The world cannot afford to slip back into Cold War thinking and a Cold war mentality and common economic interests are, should and will overshadow the Cold war mentality type of political interest as the world gets smaller.

The author is with the Nottingham University Business School China.