This month, Britain, Germany, France, Italy, South Korea, and a handful of other U.S. allies announced plans to join the new China-led Asian Infrastructure Investment Bank, despite American pressure not to. The multilateral fund is essentially China’s answer to the World Bank and the Asian Development Bank, organizations where the U.S. has long had more influence than China. China has the world’s largest foreign exchange reserves—around $3.8 trillion in December—and wants to use some to fund infrastructure development projects in Asia. It’s clear enormous investment there is necessary. It’s also clear the U.S. is concerned the AIIB—and other new China-backed lending institutions—will weaken its influence. Below is a bit of background from the December 2009 Foreign Policyexcerpt of Brad DeLong and Stephen Cohen’s prescient book The End of Influence: What Happens When Other Countries Have the Money:

Proverbs 22:7 instructs us: “The borrower is servant to the lender.” But the lesson requires some exegesis to fit smoothly…

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