| Summary: | While existing studies largely focus on the
implications of China-led new multilateral institutions to international order,
the question of underlying reasons for the establishment of those institutions
and their future development success have received less attention. China’s strategies towards institutional reform are mainly based on its
dissatiffaction with asymmetrical distributional gains within existing
multilateral institutions such as World Bank and International Monetary Fund (IMF).
By using bargaining theory in international relations, this article contributes
to explain the main conditions and mechanisms of the creation of Asian
Infrasturucture Investment Bank (AIIB). In creating AIIB, China aims to
increase its bargaining leverage which provides itself direct and indirect
benefits vis-a-vis the costs emanating from intensified strategic competition
with the US. Thus, it is argued that China’s expectation of success reinforced by direct
and indirect benefits for the development of AIIB reflects both the significant
motivations underpinning its creation and also the possibility of extended
institutional reform into other multilateral regimes. Within the context of
power transition, the political bargaining process in reforming existing
multilateral regimes is likely to be shaped by the tension between
minilateralist strategies of rising powers and truly multilateral operations
within newly emerging financial regime.
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