Biden unveils US$600 billion global infrastructure plan at G7 summit to counter China’s Belt and Road
- Clean energy, secure communications technology and health systems among focus areas for programme funded by grants, federal financing and private sector
- Five-year arrangement updating last year’s Build Back Better World initiative meant to offer alternative to ‘debt traps’, US official says, in swipe at Beijing’s model
“Together with G7 partners, we aim to mobilise US$600 billion by 2027 in global infrastructure investments,” the White House said on Sunday following Biden’s announcement.
The US would mobilise $200 billion for the initiative over the next five years “through grants, federal financing, and leveraging private sector investments”, the White House said, noting these projects would focus on clean energy, secure communications technology, health systems and other areas.
“This will only be the beginning,” it added, with the US and its G7 partners intent on ushering in “hundreds of billions in additional capital from other like-minded partners, multilateral development banks, development finance institutions, sovereign wealth funds, and more”.
Biden broached the idea of a global infrastructure building project during his presidential campaign, against the backdrop of growing accusations from the US and European countries that Beijing was burdening Belt and Road participants with loans that could not be repaid. The Belt and Road Initiative is a trade and investment scheme that links China to other economies.
Personally launched by Chinese President Xi Jinping in 2013, the initiative has expanded Beijing’s influence globally through the building of ports, bridges and infrastructure in developing countries. While there is no official data on the total amount of investments made to date, in Latin America alone, for instance, Beijing has sharply increased spending and infrastructure projects such that China-Latin America trade exceeded US$400 billion in 2021, compared to US$295 billion for the US.
A senior US official who briefed reporters on the PGII on Sunday acknowledged the Belt and Road Initiative had been influential, but believed the G7 project would hold an edge.
“There’s no doubt that the Belt and Road Initiative has been around for several years and it’s made a lot of cash disbursements and investments,” the official said.
“But I would argue that it is definitely not too late. And I’m not even sure that it is late.”
Speaking on condition of anonymity, the official said “many countries” that partnered with China were experiencing buyer’s remorse, concluding that Beijing was more interested in establishing economic and geostrategic footholds than benefiting locals.
“We’re coming to you with an offer to make investments to actually improve your country, to improve the economy and to have lasting effects on GDP and your populations,” the official added. “I think that is the deal that is being offered.”
Among G7 countries, only France and Italy have signed up to the Belt and Road Initiative. In February, Beijing and Paris announced they were jointly building seven infrastructure projects in Africa, Southeast Asia and Eastern Europe worth more than US$1.7 billion.
