With money, your political problems automatically solve themselves–China shows.

As China has reared its head on Asia-pacific, most countries in the region of Northeast and Southeast Asia have gone for a similar strategy of military alliance with U.S. and continued economic engagement with China.

But as the case of Taiwan makes clear, as China’s financial power rears its head in the region in the shape of AIIB, China’s own political troubles in the region seem to be solving themselves.

As Ricky Yeh, an Economic Analyst at the Japan Center For International Finance, points out for the Diplomat, Taiwan’s decision to join the AIIB via the mainland’s Taiwan Affairs Office (TAO)–and directly through AIIB as is conventional for any application to a multilateral body–signals Taiwan’s concession to Beijing. It demonstrates that TAO “can act as an agent of China on Taiwanese affairs.”

Moreover, Taiwan’s status as soveriegn country is gradually being eroded before the international audience, as it joins multilateral institions which either China is part of, or it controls entirely. For instance, as Yeh pointed out, when it joined the Asian Development Bank, a U.S.&Japan-led institution, Taiwan was compelled to switch from “Republic of China” to “Taipei, China” when the PRC joined in 1986. Taiwan has yet to reveal the name under which it applied to join the AIIB(!)

South Korea, too, is a case that illustrates China’s financial power is capable of solving political problems. The South Korean government has for now been trying to balance between the U.S. and China, maintaing military alliance with the former, but also increasing economic, cultural and diplomatic ties with the latter. Such “two-legged” effort, however, resulted in dilemmas–for instance, under Chinese pressure, it still struggles to decide whether to install the U.S.-proposed, THAAD missiles. But, in the case of AIIB, despite U.S. pressure not to, South Korea, like other countries like Britain and Australia, have decided to join.


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