The silly reason Taiwan’s money is not good enough for China’s new bank

Taiwan’s premier will have to find another name for his country.
Taiwan’s premier will have to find another name for his country.
Image: AP/Wally Santana
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To the annoyance of the US, usually dependable allies like Britain, France, and Australia have signed on as founding members of the Asian Infrastructure Investment Bank (AIIB), a China-driven alternative to the World Bank. Not so for another American ally: China has rejected Taiwan’s bid to join as a founding member.

The sticking point? What to call Taiwan if it were accepted.

China-Taiwan naming diplomacy is complicated. Taiwan’s official name is the “Republic of China,” and it has been since it split with the mainland after the Chinese Civil War. For China, which considers Taiwan a renegade province, that name is unacceptable. That’s why Taiwan is usually referred to as “Chinese Taipei” or “Taipei, China” in international venues like the Olympics.

Calling it simply “Taiwan” is also off-limits as, in China’s mind, it appears to elevate the island to nation-state status.

What’s odd in the case of the AIIB is that Taiwanese officials claim that they were rejected despite saying they were willing to be called ”Chinese Taipei.” We don’t know what name Taiwan attempted to apply under, and after its rejection, Taiwan said that it would reapply as an “ordinary member” instead of a founding one. It may be the case that Taiwan attempted a more controversial name the first time around.

China’s council for Taiwan affairs, for its part, reiterated (link in Chinese) its stance that Taiwan would be welcome to participate in the bank “under an appropriate name”—whatever that means.

The US has pressured allies against joining the bank, citing concerns that it will not adhere to the “high standards” of the World Bank, “particularly related to governance, and environmental and social safeguards,” according to a statement given to the Guardian.

That hasn’t stopped many of America’s best friends from going to the other side. The reality underpinning these countries’ decisions is that there is a whopping $800-billion-a-year gap in Asian infrastructure investment, as estimated by the Asian Development Bank.

Name controversies aside, Taiwan is a solid AIIB candidate. It has one of the world’s largest foreign exchange reserves—$414 billion at last count, more than neighbor and accepted founding member South Korea.

And, unlike Britain or France, it is actually in Asia.