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Subject

The United Kingdom's decision to join the Asian Infrastructure Investment Bank.

Significance

On March 12, UK finance minister George Osborne announced that the United Kingdom had applied to join the Asian Infrastructure Investment Bank (AIIB) announced by China last year. It was the first large US ally to do so. An unnamed White House official told a journalist that Washington was frustrated about London's "constant accommodation" with Beijing. These developments have sparked fears in some quarters that China's rise could drive a wedge between Washington and its closest friends.

Impacts

Cooperating with China to reform international financial institutions -- in consultation with Washington -- is a longstanding UK objective.

UK objectives vis-a-vis China reflect the sometimes-conflicting priorities of a diverse electorate; they go beyond trade.

Boosting trade currently enjoys high-level political favour, but will not be the priority indefinitely or in every policy area.

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