What differentiates the US-driven Blue Dot Network from China’s Belt and Road Initiative? Money
- The revived Blue Dot Network is the latest in a series of attempts by the US, Japan and Australia to counter China’s transnational infrastructure-focused scheme
- However, it lacks the funding needed to back projects in the way China has been able to, using its foreign exchange reserves and financing from state banks
Imitation, it is said, is a “form of flattery” and if that is true then China should be feeling extremely flattered by the lengths to which other powers (notably the US, Japan and Australia) are prepared to go to emulate its remarkable infrastructure initiatives, domestically and overseas.
Preserving individual liberty – as distinct from broader socio-economic aims – is not the kind of activity that a politically neutral body like the OECD would normally be expected to engage in, and it is not stretching a point to see this as part of a wider China-criticising trend.
The context in which the Blue Dot Network has come into being is certainly political (though it might not sound so from its nondescript title). Its genesis has to be seen against the background of Chinese President Xi Jinping’s launch of the Belt and Road Initiative in 2013.
The reaction of the US (then under president Donald Trump) was defensive and aggressive, and much the same goes for Japan and later India and Australia. They began scrambling to come up with alternatives to the belt and road, rather than embracing or cooperating with the Chinese project.
Neither of these initiatives got off the ground, largely because their sponsors lacked the funds to support international infrastructure projects in the way that China was able to back belt and road projects using its foreign exchange reserves and funding from state banks.
Beyond that, the Blue Dot Network is supposed to ensure “responsible business conduct, high quality infrastructure governance, anti-corruption, gender equality, sustainable finance as well as economic and social progress”.
Such objectives are reminiscent of the criteria cited by Western critics of China’s Belt and Initiative, to which Chinese officials have responded with the argument that much basic infrastructure would never get built at all if such demanding development criteria were applied.
As one highly-placed source in Beijing observed to me, private-sector investments in infrastructure are already evaluated on the basis of ESG (environment, social and governance) objectives, which most private-sector investors and financial institutions “take very seriously”.
The Blue Dot Network, however, implies a supranational institution with the ability to formulate standards recognised by all private- and public-sector investors, and with the authority to impose discipline on those who do not comply, the source suggested.
As such, it could deter investors wishing to be involved in infrastructure projects such as those sponsored by the Belt and Road Initiative that do not qualify for Blue Dot approval. This could be seen as a way to “contain” China’s initiative. But the bottom line is that Blue Dot does not have money. China does.
Anthony Rowley is a veteran journalist specialising in Asian economic and financial affairs