New G-7 infrastructure plan offers alternative to China Belt & Road

It also can dovetail with some of Biden’s ambitious economic schemes related to the economy and infrastructure. Under the umbrella of Quad countries (US, Japan, Australia and India) too there has been discussion on enhancing economic cooperation as well as connectivity. Then US National Security Advisor Robert O Brien had compared the Blue Dot Network to Michelin Guide, which meant that just like a Michelin star is the sign of approval for a restaurant, a blue dot would be a seal of approval for infrastructure projects.

• As the economic component of the “Indo-Pacific Strategy”, on 23 May 2022, President Biden officially launched the “Indo-Pacific Economic Framework” (or the IPEF in short) during his visit to Japan.
• China and the United States are now competing fiercely for influence over the developing countries across the world.
• In Beijing’s eyes, the US has increasingly launched all-round, cross-regional, and global competition against China, with an attempt to closely integrate economic encirclement, technological blockade, military and security containment, and ideological suppression.
• Despite its rising international status, China is not yet ready to challenge the U.S.-led Western primacy and needs to acknowledge the limitations of its power.

It is worth noting that the Trump administration tried to add costs to China in pushing forward Digital Silk Road cooperation in certain countries via technological assistance, intelligence-sharing, and opinion-making. To crack down on Huawei’s international business in areas such as 5G and undersea cable, the US government promoted the Clean Network program, demanding that member states not use equipment and technology provided by Chinese companies when building their domestic digital infrastructure. With this plan, the US hoped to foster a so-called open, interoperable, reliable and secure internet and strengthen the US ability to shape the digital future of developing countries.

Neither the other Western-oriented infrastructure initiatives, namely, the EU’s Global Gateway, the United States’ Blue Dot Network, Japan’s Quality Infrastructure Investment, nor the G7’s B3W have yet produced enough geoeconomic momentum globally to seriously rival the BRI. Recent years have seen the unfolding of a successive wave of competing regional and global initiatives, all of which aim to accelerate interregional connectivity through infrastructure investment and construction. The G7 countries must convince the global community that they can provide a credible alternative to China’s BRI that has the capability to undertake the urgent upgrading of infrastructure needed in a vast number of developing nations.

The Belt and Road Initiative and US competitive strategy towards China

The BRI could be used by China to transform its economic and financial power into geostrategic leverage and influence, by continuing to promote infrastructure connectivity as an important national strategy in its attempts to gain control over markets and industrial supply chains. Through the BRI implementation, China hopes to establish a new model for global infrastructure financing and development. Building connectivity based on infrastructure development is the key to China’s BRI and also the key selling point in encouraging the regional countries’ participation. It is noteworthy, however, that U.S. investments in many developing nations have declined and have been unable to meet their development needs in recent years. China’s total investment in infrastructure in the Belt and Road countries was estimated at between US$156.2 billion and US$332.6 billion from 2013 to 2021. China has financed and built thousands of infrastructure projects abroad, ranging from railways, seaports, airports, power plants and bridges to industrial parks and telecommunication networks around the world.

Initiatives

As evidenced by the announcements of the B3W and the PGII, the U.S.-led G7 seems to be playing a catch-up game with China on global infrastructure development. No plan proposed by a single country or grouping could come close to meeting the developing nations’ infrastructure investment needs. As estimated by the Asian Development Bank, Asia and the Pacific countries will require over US$22.5 trillion for climate-adjusted infrastructure development up to 2030.

In 2021, the nagad88bangladesh.com/ World Bank approved around US$17 billion in loans to the developing countries for infrastructure, in sectors ranging from transport, energy and water to information and communication technologies (The World Bank 2021). Meanwhile, several countries in the region and beyond are pushing back against the BRI on the grounds that its China-invested infrastructure projects are costly and impractical, with internal transactions tainted by corruption issues. In the period since its announcement, the B3W attracted little regional or international attention in terms of its capability to finance infrastructure development. The BRI has greatly unsettled the existing global geopolitical landscape, since it is largely welcomed by developing and middle-income countries across Asia, the Pacific Island states, Africa and Latin America. The Biden administration views reducing dependence on China-centric supply chains as an important part of strategic competition with China as a great power.