AMERICA says it welcomes China’s ascent to great-power status, so long as the Chinese respect international norms and play a proper part in the multilateral system. China suspects that, in practice, America tries to hem it in whenever it does anything on the world stage. In the case of the Asian Infrastructure Investment Bank (AIIB), America seems to be confirming China’s darkest fears: it has adopted a policy of containment that is wrong in principle and has failed in practice.

Flush with the world’s largest foreign-exchange reserves, China plans a new bank to help match Asia’s vast savings with its even vaster need for new bridges, roads and other necessities of development. America dislikes the idea because it thinks the bank will not abide by high standards of creditworthiness and transparency; it also fears the institution will be a vehicle for Chinese influence. Though the Americans say they have not lobbied against the bank, they have put pressure on allies not to join it. When Britain became the first country outside Asia to apply for membership, an American official harrumphed about its trend towards “constant accommodation” of China. That admonition did not stop Germany, France and Italy declaring this week that they too wanted to be founding members. Others may follow (see article).

America is not wrong to be suspicious of China’s motives. The AIIB is designed to project Chinese power in the region. Institutions already exist to match capital with projects, most obviously the Asian Development Bank (ADB). Rather than setting up a new lender, China could have put more money into an old one. Nor is America wrong to warn against a supine approach to China: Britain’s limp response to the protests that rocked Hong Kong last year did it no credit. America’s doubts over the bank’s lending policies cannot just be wished away, either. As Sri Lanka’s largest infrastructure project shows, Chinese-financed development plans can be opaque, careless of environmental concerns and shot through with dodgy political dealings (see article).

A missed opportunity

But there are three reasons why America should be more receptive toward the AIIB and its allies’ potential membership. The first is that Asia’s need for infrastructure is vast and pressing. The continent’s relentless urbanisation requires at least $8 trillion of infrastructure spending in this decade, according to the ADB. The AIIB will not finance this splurge on its own: it looks likely to end up with a capital base of between $50 billion and $100 billion. But it will help.