RECENT reports affirm that China's shareholding - and voting power - in the Asian Infrastructure Investment Bank (AIIB), will be 30 per cent, while that of India - the next major shareholder - will be around 8 per cent.
Since some of the decisions by AIIB require a super-majority of 75 per cent, China has the ability at least to veto any significant decisions by the AIIB. This may stoke further anxiety about the AIIB among Western nations and some of China's neighbours.
Many observers see the AIIB as a symbol of China's rise, as well as a victory for its economic diplomacy.
Even those countries which have joined it, such as India, Australia, Britain, Germany, France and Italy, are apprehensive that they might contribute to an initiative that might enhance China's authority and feed into geopolitical ambitions that are not always welcome.
They need not worry. The AIIB should be seen by the international community not as a triumph for China, but a major challenge to its rise.
The AIIB is important for several reasons. First, it challenges the principle of "Asean centrality" in the Asian regional architecture. It represents the most serious initiative by China in Asian cooperation.
Until now, the Asean has been in the driver's seat of most Asian regional institutions. The Asia Pacific Economic Cooperation (Apec) forum launched in 1989 was a Japanese-Australian initiative. China had little to do with the establishment of the Asean Regional Forum in 1994 and of the Asean Plus Three process in 1997, and the East Asian Summit in 2005.
Second, the AIIB is the final nail in the coffin of Deng Xiaoping's "China should not lead" dictum, which governed China's foreign policy during the 1980s and 90s.
This is buried by the AIIB and other regional and global initiatives by China, such as the Silk Road Fund, and the New Development Bank and the Contingent Reserve Arrangement being set up by the Brics (Brazil, Russia, India, China and South Africa) grouping, in which China is a key player.
But the AIIB is good news for the international community.
It poses no risk of Chinese hegemony, while putting China's leadership capacity to its most severe test to date.
The AIIB is not an "alternative" or "parallel" form of multilateralism. It is in keeping with "open regionalism".
Participation is open to not only any country in Asia, but also outside. Germany, France, Britain and Italy, all four G-7 members, have already signalled their participation.
Failure will damage China's image
THE AIIB, the Silk Road Fund, the NDB and the CRA are all mainly economic in purpose. China will find it much more difficult to organise global and Asian cooperation in political and security affairs.
For example, China has proposed the idea of a Conference on Interaction and Confidence-Building Measures in Asia, calling for "Asian solutions to Asian problems". But this initiative has found little traction - and has even evoked suspicion.
Its prospects are diminished by China's territorial disputes with its neighbours and the mistrust and apprehensions about Chinese geopolitical intentions and power in the region.
Having proposed the AIIB, Beijing will be under intense international watch to deliver results. China has to ensure that it does not usher in a Chinese Asian fiefdom, but conforms to international norms and standards of transparency for such institutions.
But can China sustain it at a time of lower economic growth and growing demands for its internal social and welfare spending to satisfy its own people?
If the AIIB fails, China's image and clout as an emerging global power will be seriously damaged. But if China succeeds with this venture - and success here requires China making significant adjustments to its regional policy by abandoning its expansive territorial claims and enhancing its military and economic transparency - Asia and the West, including the US, and indeed the entire system of global governance, will be the big winners.
The Obama administration's negative response towards the AIIB has been widely criticised, but it's not hard to understand. First, the United States' response is not new and while this may surprise many, it is not necessarily motivated by its concerns about China's rise.
The George H.W. Bush administration rejected the Malaysian proposal for an East Asian Economic Grouping (which was renamed the East Asian Economic Caucus) in the early 1990s, which would have been led by Japan. The Clinton administration killed Japan's Asian Monetary Fund proposal in the wake of the Asian financial crisis in 1997.
The participation of America's European allies, as well as Australia, in the AIIB creates the possibility of them playing the role of "good cop" to Washington's "bad cop". There is no doubt that Washington will encourage its allies to use their participation in these new forums to ensure their transparency, accountability and openness.
The writer is professor of international relations at American University, Washington. His recent books include The End Of American World Order (Polity 2014 and Oxford University Press, 2015).