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So here’s the fiction: America and Europe stand united against the “rest of the world”. The transatlantic alliance is strong, solid and a bulwark against the machinations of China and the world’s other emerging nations.

Washington and Brussels are like-minded, like-thinking entities which see eye to eye on almost everything. Together, they can still rule the world.

Perhaps in the 20th century — but no longer. Here are the facts: the world has changed from unipolar to multi-polar or even “no-polar”. For all its military might, the US no longer rules the world. For proof, look no further than the way Israeli Prime Minister Benyamin Netanyahu is obstructing progress on US-Iran nuclear talks.

And here are some more facts: America and the EU are divided over the death penalty, Guantanamo Bay, illegal renditions, the use of torture and the revelations of spying by the National Security Agency as revealed by Edward Snowden.

They disagree over how to deal with Russia and Ukraine. And while America sees China mainly as a strategic competitor, Europe is happy to work with Beijing on tackling many 21st century challenges.

Certainly, there are some points of convergence. Significantly, negotiations are underway on a Transatlantic Trade and Investment Partnership (TTIP), seen by many as the last attempt by a declining West to impose its economic rule-making model on a watching world.

But even as they seek agreement on TTIP, many European states are posing the BIGGEST challenge to the US by deciding to join the Chinese-led, Chinese-inspired $50 billion Asia Infrastructure Investment Bank (AIIB) which Washington continues to firmly oppose.

So far, EU members Britain, France, Germany and Italy have said they want to be founding members of the AIIB. But other Europeans will undoubtedly join their ranks.

The story is not just about Washington vs Beijing; it’s about a changing world order, the shift of power from west to east, the rise of China and its challenge to years of US domination.

It’s about the need to change and reform post-World War II multilateral institutions, including the World Bank and the International Monetary Fund.

And it’s about a world desperately in need of cash, especially for badly-needed infrastructure projects — and a rising China which has more money than it can handle.

To be fair, US Secretary of Treasury Jack Lew has said that the US was not opposed to the creation of the AIIB. “There are obviously vast needs in Asia and many parts of the world for infrastructure investment,” he told a Congressional hearing on the status of the international financial system.

The US concern, he said, has always been whether such an international investment bank will adhere to the high standards such as in protecting workers’ rights, the environment and dealing properly with corruption issues.

The bank, proposed by President Xi Jinping in 2013 during a visit to Indonesia, is expected to be launched formally by the end of this year.

All Asian countries can apply to become founding members until March 31.

Chinese experts say they are looking less for European financial support and more for Europe’s management experience to share with the AIIB.

France, Germany and Italy announced they would join the Bank after Britain said it was doing so last week. Australia, a key US ally in the Asia-Pacific region which had come under pressure from Washington to stay out of the new bank, has also said that it will now rethink that position. South Korea is also expected to join.

Other European countries are expected to follow the bigger EU nations’ lead. And why not? Like most Asian countries, Europeans are looking to invest in new infrastructure to raise levels of connectivity across the continent.

Policymakers are hoping that China will be an important contributor to the 300 billion dollar infrastructure fund announced earlier this year by European Commission President Jean-Claude Juncker.

Britain hopes to establish itself as the number one destination for Chinese investment. China is also a strong investor in Germany and in France.

Analysts point out that the US has misplayed its hands and that the best way to ensure that China doesn’t dominate the AIIB is to fill it with other powers. This, they argue would result in much stricter governance rules and safeguards.

The AIIB is not the only regional project China has proposed that Washington will have to grapple with. Beijing’s “one belt, one road” Silk Road projects are moving rapidly from theoretical to actual, much to the dismay of America and some European states.

The Asian Development Bank has estimated Asia’s infrastructure needs at $750 billion a year, far beyond the ADB’s capacity. With connectivity the buzzword across the region, the new Bank is expected to be very busy pumping money into major infrastructure projects.

China has also been quick to respond to huge and acute infrastructure needs in the developing world, in contrast with the lengthy project processes required by other lenders.

In response to the Chinese initiatives, the Japanese government has also said it wants to focus on infrastructure projects in developing countries.

World leaders at the G20 Summit in Brisbane in 2014 recognised infrastructure demand in the developing world as a new source of global growth in the aftermath of the global financial crisis.

The transatlantic trade deal may see the light of the day by end-2015 — even though negotiations are tough and public resistance to the pact is high. But even if they do clinch an agreement on trade, America and Europe will not always share a similar vision of life in a rapidly-changing 21st century.