Hostility to China preventing groundbreaking global cooperation on infrastructure building
- With enough support, the China-led AIIB could expand to lead a joint effort to address infrastructure gaps that were already huge before Covid-19 struck, boosting economic recovery
- The other major Chinese-led project, the belt and road, is similarly shunned by the US and some major developed countries, to the detriment of the greater interest
A toxic mixture of resentment, envy and fear seems to characterise Western reactions to China’s economic initiatives. This is very apparent in the area of basic infrastructure, where national competition threatens to trump international cooperation just when joint initiatives are most needed.
The China-led Asian Infrastructure Investment Bank is one of few such multilateral institutions designed specifically to focus on infrastructure rather than on broad development issues. Some in China argue that it could serve as a model for a global infrastructure bank.
But others say that, however rational this argument may be, it is unlikely to win international acceptance at a time when tensions are running high on other issues between, on the one hand, the US and its “alliance partners” and on the other hand, China.
The idea will be seen, one senior Chinese financial official tells me, as another example of China “trying to throw its weight around”. And yet the need for a global institution with a specific remit to address infrastructure issues seems undeniable.
Even before Covid-19 struck, the global need for huge spending on transport, energy and communications infrastructure in the coming decades was widely acknowledged. This is a huge challenge and the pandemic has added a new dimension – the need for digital infrastructure.
