US Will Pitch in $200 Billion for Global Infrastructure to Challenge Chinese Influence

If you build it, they will come… under your influence. On Sunday, US President Joe Biden announced a $200 billion pledge to the G-7’s Partnership for Global Infrastructure and Investment, a multi-lateral plan among democratic countries to invest in infrastructure…

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If you build it, they will come… under your influence.

On Sunday, US President Joe Biden announced a $200 billion pledge to the G-7’s Partnership for Global Infrastructure and Investment, a multi-lateral plan among democratic countries to invest in infrastructure projects in developing countries that will challenge China’s own, similar efforts.

On the Belt and Road Again

In 2013, China launched what it calls The Belt and Road Initiative, a global infrastructure strategy designed to increase China’s global reach and influence that has touched at least 70 countries and international organizations since it launched. But some democratic nations are concerned the initiative could leave Xi Jinping’s autocratic state with too much influence on developing nations.

A report published last year by AidData, a research center at the College of William and Mary, counted $843 billion in Chinese loans for over 13,000 projects primarily between 2000 and 2017, much of it under the Belt and Road Initiative. Sunday’s announcement was a chance to shift the global balance:

  • The US will headline the project with a five-year, $200 billion contribution that will include direct government aid and private investments — the G-7 as a whole, including private partners, will make $600 billion in investments by 2027.
  • The infrastructure projects will focus on climate, information technology, and health systems — initial projects with investment include a $2 billion solar project in Angola, a $600 million submarine internet cable that will run from Singapore to France.

“This isn’t aid or charity,” Biden said at a G-7 meeting in Bavaria on Sunday. “It’s a chance for us to share our positive vision for the future because when democracies demonstrate what we can do, all that we have to offer, I have no doubt that we will win the competition every time.”

Debtor’s Remorse: Malaysia, Sri Lanka, the Maldives, and Pakistan have all complained in recent years about the opaque terms of Chinese infrastructure deals. AidData found 42 low- and middle-income countries with debt exposure to China over 10% of their GDP — and found that 35% of China’s infrastructure projects abroad have featured corruption scandals, labor violations, environmental damage, or other significant issues. Does China have an equivalent expression for “read the fine print?”

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