China’s decision to create a new development bank for Asia is proving a highly divisive enterprise. The Asian Infrastructure Investment Bank, due to open its doors later this year, has sparked deep divisions between Beijing and Washington. The latter argues that the bank will undermine existing international institutions and that it will be a vehicle for a broader expression of Chinese strategic interests. Now the AIIB has also become a source of major discord between the US and some of its chief allies, including the UK, which has decided to become a founder member of the new institution.

That sparked an angry response in Washington, a sorry development that reflects the huge mistake the US has made in opposing a bank aimed at helping to meet Asia’s need for trillions of dollars of investment in energy, power, transportation, telecommunications and other infrastructure sectors.

China and 20 other Asian countries agreed in October to establish the AIIB. Beijing will provide the bulk of capital and founding members include India, the second largest shareholder, as well as two Gulf Arab states, Kuwait and Qatar. A number of non-regional countries were invited to be founder members, an offer rejected by the US, which then lobbied allies, including Australia, South Korea, the UK and other European states, not to join.