Macroscope | In the West’s infrastructure battle with China, the G7’s empty promises show politics trumps reality

Anyone might have been forgiven for thinking that Group of 7 leaders who gathered in Cornwall for their recent summit were “lords of the universe”, seeing the airy confidence with which they presented plans to set the world to rights on everything from the pandemic and climate change to infrastructure.

There was no sign of the humility which descended on the G7 for a while. After the 2008 global financial crisis brought these powers to their economic knees, a new group of advanced and emerging economies – the Group of 20 – came into being in which China was recognised as a powerful economic force.

China has now been relegated to the ranks of a leading threat by the United States and its allies within the G7 while Russia has been excluded from the group for several years. In this sense, things have regressed, rather than progressed, from a global perspective.

What emerged from the latest G7 gathering was that market economies are having problems aligning the resources of their public and private sectors behind their national plans. For all their talk of “building back better” after the destruction wrought by the Covid-19 pandemic, the truth is that G7 nations are still coming up short in finding the cash for such grand gestures.

This is vitally important when infrastructure is being relied on so heavily to give the world the stimulus needed to get back on track after the pandemic. Yet, the G7 seems more intent on countering China’s Belt and Road Initiative than on producing financially viable and global solutions.

Successive attempts to challenge the initiative with rival schemes have amounted to little, for want of finance on a scale to match China’s resources. So, who exactly is the new champion conjured up in Cornwall by the G7 to challenge the Chinese dragon?