U.S. President Joe Biden announced on Sunday a G-7 project to challenge China’s “Belt and Road Initiative” (BRI).
The G-7 initiative is set to raise € 600 billion. USD, for which infrastructure programs will be implemented in poor countries. Washington plans to provide up to $ 200 billion over the next five years. Together with the G7 countries, it plans to mobilize up to $ 600 billion for the same period.
Unlike China’s huge BRI, the proposed G-7 funding will be attracted mainly from private investors and is therefore not guaranteed.
The plan, unveiled at last year’s G-7 summit, will target countries in dire need of everything – from roads to ports – that have often relied on China.
European Commission President Ursula von der Leyen stated the G7 offers “sustainable, quality infrastructure” and would be “listening closely to the recipient countries.”
Among the initial initiatives include a $2 billion solar farm in Angola, a $320 million hospital construction in Ivory Coast, and $40 million to promote regional energy trade in Southeast Asia.
The large-scale BRI has successfully used Chinese infrastructure knowledge to spread Beijing’s economic and diplomatic tentacles at key strategic points worldwide, competing with Western influence.
Mr Biden, who aims to restore U.S. leadership after Donald Trump’s isolationist policy, says his proposed initiative will catch up with China and provide a better alternative.
Unlike the Chinese initiative, which relies on state-controlled funds and companies, Biden says the U.S. and other G-7 governments will provide only limited sums of money while encouraging substantial private sector investment.
Under this capitalist scenario, unlike the communist one, U.S. officials say, recipient countries will be able to avoid debt traps and other influential tactics used by the Chinese to expand their physical investment in support of politically and financially vulnerable countries.
From now until 2027, the U.S. government will seek to raise $ 600 billion. “Through grants, federal funding, and attracting private sector investment,” the White House said.
“This is just the beginning: the United States and its G-7 partners will also seek to mobilize hundreds of billions of additional capital from other like-minded partners, multilateral development banks, development finance institutions, sovereign wealth funds and other sources,” the report said.
“Not too late”
The investment goal is only ambitious, and one high-ranking U.S. official, who briefed the media, has acknowledged that the West is currently in second place in global infrastructure development.
However, the official does not believe that China has a significant advantage.
“There is no doubt that the Belt and Road initiative has been around for a number of years and that a lot of money has been paid out and invested – and that we are working towards it after many years of investing,” he added.
The official, who wished to remain anonymous, said “many countries” cooperating with China were suffering from a lack of conscience and concluded that Beijing was more interested in establishing economic and geostrategic pillars than in benefiting the local population.
“We will come up with a proposal to invest in order to really improve the situation of the countries, their economies and have a long-term impact on GDP and the people of the countries,” the official said. “I think such a deal will be offered.”
While the apparent targets of the US-led initiative will be in Africa, South America and much of Asia will also receive attention.
The official said that the crisis caused by Russia’s catastrophic invasion of Ukraine means that “even Eastern Europe” could be included in the initiative.
China opposes statements and actions denigrating BRI
Beijing opposes actions and statements that, under the pretext of building global infrastructure, “denigrate and slander” China’s “One Belt, One Road” initiative, said Chinese Foreign Ministry spokesman Zhao Lijiang, quoted by TASS.
“With regard to the G7 initiative that you mentioned, China welcomes all initiatives that help build global infrastructure,” said a Chinese ministry spokesman. According to him, his country does not face a problem, such as replacing one initiative with another. However, “we oppose statements and actions that, under the guise of building infrastructure, encourage geopolitical calculations”, slander and denigrate the “One Belt, One Road” initiative, the diplomat added.
The “One Belt, One Road” initiative is a concept proposed in 2013 by Chinese President Xi Jinping, which aims to boost international trade and investment projects involving more countries around the world, including the use of stakeholder capital. The Chinese say the plan offers low- and middle-income countries comprehensive, transparent, value-based infrastructure development funding. More than 150 nations and organizations around the world have already joined the initiative.