G7 to counter China's Belt and Road Initiative with own grand infrastructure project
The plan involves ‘market-driven private sector, paired with high standards and transparency in public funding’Europost
China may not have been represented at the Group of Seven richest democracies' summit in Cornwall but wound up a focus of talks as the US announced a massive infrastructure plan to counter Beijing’s multi-trillion-dollar Belt and Road Initiative.
The so-called “Build Back Better World (B3W), agreed by the G7 leaders, is planned to be a values-driven, high-standard, and transparent infrastructure partnership led by major democracies with the aim of helping narrow the $40trn needed by developing nations by 2035”, according to a US government statement.
“B3W will collectively catalyse hundreds of billions of dollars of infrastructure investment for low- and middle-income countries in the coming years,” it said, adding that the plan would “mobilise private capital through development finance" in areas such as climate, health and health security, digital technology, and gender equity and equality
"This is not just about confronting or taking on China," a senior official in Biden's administration commented for Reuters. "But until now we haven't offered a positive alternative that reflects our values, our standards and our way of doing business."
It was, however, not immediately clear how exactly the plan would work or how much capital it would ultimately allocate.
China's Belt and Road Initiative (BRI) scheme, which Xi launched in 2013, involves development and investment initiatives that would stretch from Asia to Europe and beyond. More than 100 countries have already signed agreements with China to cooperate in BRI projects like railways, ports, highways and other infrastructure.
Yet, critics say Xi's plan is aimed at creating a modern version of the ancient Silk Road trade route to link China with Asia, Europe and beyond is a vehicle for the expansion of Communist China. Therefore, the leaders of the G7 - the United States, Canada, Britain, Germany, Italy, France and Japan - want to use their gathering in the seaside resort of Carbis Bay to show the world that the richest democracies can offer an alternative to China's growing clout.
Beijing for its part says such doubts betray the "imperial hangover" of many Western powers that humiliated China for centuries.
Nevertheless, the re-emergence of China as a leading global power is considered to be one of the most significant geopolitical events of recent times, alongside the 1991 fall of the Soviet Union that ended the Cold War. Back in 1979 the country had an economy that was smaller than Italy's, but after opening to foreign investment and introducing market reforms, it has become the world's second-largest economy and is a global leader in a range of new technologies.
The US official said until now, the West had failed to offer a positive alternative to the "lack of transparency, poor environmental and labour standards, and coercive approach" of the Chinese government that had left many countries worse off.
According to a Refinitiv database, quoted by Reuters, as of mid-last year, more than 2,600 projects at a cost of $3.7trn were linked to the BRI, although the Chinese foreign ministry said last June that about 20% of projects had been seriously affected by the COVID-19 pandemic.