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The G7 has pledged to raise US$600 billion over five years to fund infrastructure projects in developing countries. Photo: Reuters

China hits back at US over G7 ‘zero-sum’ belt and road alternative

  • Washington’s revived partnership is an attempt to ‘smear Beijing’ and its infrastructure initiative, foreign ministry says
  • The American effort should not be underestimated or discredited, analyst says
Beijing has slammed Washington’s renewed efforts to jointly counter China’s Belt and Road Initiative, calling the G7-backed global infrastructure project a geopolitical scheme to smear and contain China.
US President Joe Biden and other leaders from the Group of 7 unveiled the “Partnership for Global Infrastructure and Investment” at their annual gathering in Germany on Sunday, with a pledge to raise US$600 billion over five years to fund infrastructure projects in developing countries.

The partnership is largely a revival of the Build Back Better World initiative launched at the G7 summit a year ago – a scheme that faltered over financial difficulties and competing efforts by the United States and its European allies, such as the EU’s Global Gateway.

Outlining the Biden administration’s China policy in May, US Secretary of State Antony Blinken said the renewed G7 effort would be “a coordinated, high-standard, and transparent approach to meet the enormous infrastructure needs in developing countries”.

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Biden at G7 announces global infrastructure plan to counter China’s Belt and Road

Biden at G7 announces global infrastructure plan to counter China’s Belt and Road

Beijing last week described Biden’s rebranded initiative as a “zero-sum game approach” targeting China. On Monday, Chinese foreign ministry spokesman Zhao Lijian doubled down on Beijing’s criticism.

“China always welcomes all initiatives to promote the construction of global infrastructure. We don’t think there is such an issue of similar initiatives replacing each other,” Zhao said.

“But we oppose the promotion of geopolitical calculations under the banner of infrastructure construction and words and deeds that try to smear and slander the Belt and Road Initiative.”

He also took a jab at the Biden administration over its inability to attract enough financial contributions from its G7 partners.

“Whether it’s the Build Back Better World initiative or something else, the international community wants to see real money and projects that actually benefit people,” Zhao said.

In a background briefing on Sunday, a senior US official said the new US-led initiative sought to offer an alternative to infrastructure models that sold “debt traps”, an accusation critics have often used to attack Beijing’s top foreign policy and global investment project.

Zhao shot back on Monday, dismissing the criticism while accusing Washington of being the “real creator of debt traps”.

“Expansive monetary policy, unregulated financial innovation, malicious short-selling and other actions by the United States have exacerbated the debt burden of developing countries, and it is even more to blame for the debt traps of relevant countries,” he said.

As part of the global partnership, the US will mobilise US$200 billion in grants, federal funds and private investment by 2027 to help countries in Africa, Asia and Latin America tackle climate change, improve global health, gender equity and digital infrastructure, according to the White House.

European Commission President Ursula von der Leyen told the G7 that Europe would also mobilise €300 billion (US$316.7 billion) for the partnership over the same time to build a sustainable alternative to the belt and road scheme.

Shi Yinhong, an expert on international affairs at Beijing’s Renmin University, said the renewed Western enthusiasm for competing with China over global infrastructure came at a historical low point for the Belt and Road Initiative.

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Many economists have warned that China’s economic slowdown, exacerbated by Beijing’s stringent Covid-19 controls and the war in Ukraine, could further strain the initiative and hamper Beijing’s efforts to counter the US.

“The Belt and Road Initiative has shrunk since 2018 and the prolonged pandemic and the Ukraine crisis have accelerated its downsizing,” Shi said.

He said Beijing should not underestimate Biden’s latest infrastructure push, or discredit it as simply a relaunch of an old effort.

“Infrastructure remains one of top priorities on which the Biden administration wants to compete with China,” he said.

“I wouldn’t describe it as a failure for the US and its European partners to substantiate the goals they put forward last year and roll out a financing schedule in a bid to address the global infrastructure deficit.”

01:33

China-funded international airport in Pakistan expected to be ready in September 2023

China-funded international airport in Pakistan expected to be ready in September 2023

Shi cautioned that China’s own initiative might face greater challenges if Beijing failed to address mounting concerns over the push for global influence through infrastructure projects and their cost-benefit.

“If China continues to view its own initiative through the lens of the US-China rivalry instead of providing public goods for the world, the situation is likely to turn even more unfavourably against China,” he said.

But other analysts said the partnership’s impact on China should not be overstated.

Guo Hai, a researcher at the Institute of Public Policy at South China University of Technology in Guangzhou, described it as “an old wine in a new bottle” and said details of the US project remained sketchy.

“We still don’t know whether [Biden] has integrated the infrastructure investment plans of several countries, or they are just under the same name and making separate independent investments,” Guo said.

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He said it would be a challenge for Biden to unite its allies and deliver the goal of raising US$600 billion.

But the Western initiative, which set “a definitely higher standard than the Belt and Road Initiative” in terms of investment and infrastructure building, might pose challenges for China in the long run, Guo said.

Yu Xiang, a non-resident senior fellow at Tsinghua University’s Centre for International Security and Strategy, also said global economic hardship would make it hard for Biden and Europe to secure the promised funding for their new initiative.

Besides, “the US itself is very divided politically”, he said, citing the divisive ruling by the US Supreme Court on abortion.

Yu noted China had made major headway in pushing the belt and road across the world, enlisting support from more than 140 countries.

“It is very unlikely the US or G7 can achieve this in a short time,” he said.

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