Skip to main content

The problem with the G7’s plan to rival China’s Belt and Road Initiative

The problem with the G7’s plan to rival China’s Belt and Road Initiative

A Western attempt to match China’s landmark infrastructure scheme lacks the funding and ambition of the original

China’s geopolitical rivals have long struggled to launch a viable alternative to Beijing’s globe-spanning Belt and Road Initiative (BRI) for infrastructure. Now one further attempt looks set to be rolled out at this weekend’s G7 meeting – and most likely another failure too.

Dubbed the “Clean Green Initiative”, the new plan is part of a package being unveiled as Prime Minister Boris Johnson hosts world leaders at the G7 meeting in Cornwall. Set against a backdrop of intensifying competition between China and the West, the plan appears to promise emerging nations a more sustainable alternative to Beijing’s largesse, and one with fewer strings attached.

[see also: China’s Covid cover-up?]

All this sounds promising. More than 100 emerging economies have signed up to build railways, ports and power stations under the BRI since it was launched in 2013. The scheme has invested many hundreds of billions of dollars with the aim of bolstering trade routes between China and the rest of the world.

Those BRI deals often become fraught, however. Loan recipients can struggle to repay Chinese debts, or suffer through projects that fail to meet basic standards in areas such as sustainability and labour rights. Given that estimates suggest emerging Asia alone needs around $1.7trn a year in new infrastructure over the coming decade, any serious BRI alternative is likely to be welcomed.

The G7’s plan arrives at a good moment too, as Covid-19 has significantly slowed BRI’s progress. Infrastructure is hard to put together during lockdowns, leading to lengthy project delays. Border restrictions mean Chinese workers have been unable to travel to build projects abroad. Economic challenges at home, meanwhile, have caused China’s leaders to grow more circumspect about expensive foreign projects that often fail to repay costs.

So what’s the problem with the G7 plan? Money, or rather the lack of it. Leaked details suggest that the Clean Green Initiative will have little to none. Instead, the plan is likely to involve “a pledge toward creating a strategic framework”, according to an official quoted by Bloomberg – just the kind of vague promise that would produce derision in Beijing.

This is now something of a pattern. During the Trump years, the United States talked often about developing a BRI rival. In one notorious example from 2018, then secretary of state Mike Pompeo pledged to create a new fund to push back against China, but managed to find only a paltry $113m to put in it.

[see also: The new EU-China trade deal is driven by a commercial realpolitik – and the world knows it]

Another recent example, curiously named the “Blue Dot” initiative, was developed by the US along with Australia and Japan. A kind of global infrastructure Kitemark, it aims to attract private sector money from pension funds and other major investors to emerging market infrastructure deals. Launched in 2019, it at first achieved almost nothing, only to be dusted off again in recent weeks. Again, it has no money of its own.

At one level the US and its allies are right to avoid matching China dollar for dollar. Chinese lending often does produce high-quality infrastructure at reasonable cost. But Beijing also has a habit of supporting white elephant projects that happen to be geopolitically useful – not a habit others should seek to mimic.

US president Joe Biden shows signs of a more serious approach. He floated the idea of a BRI rival with Boris Johnson earlier this year, as part of wider plans for what he has called a new era of “extreme competition” with China. At home the US president seems ever-more comfortable with plans to borrow freely to invest in infrastructure. So why not do the same internationally?

There are models that might be followed too. The most obvious is Japan, which has quietly funded billions worth of projects around Asia, winning a reputation for infrastructure quality that generally far exceeds that of China. A coalition capable of funding new infrastructure exists too, were the G7 to work with both the European Union and advanced Asian economies such as Australia and Japan. Under its new Asia tsar Kurt Campbell, the US is also more able to bring such partnerships together, as it recently did with a plan to distribute vaccines.

Ultimately, such a plan can only work with political will and resources attached. Infrastructure is expensive, and especially so for transnational projects such as rail lines or smart electricity grids. Western credibility is at stake too. Emerging economies will watch carefully to see how seriously groupings such as the G7 plan to compete with China. Schemes like the G7’s, which talk a good game but deliver little in terms of resources, risk doing more harm than good.


Popular posts from this blog

SSG Commando Muddassir Iqbal of Pakistan Army

“ Commando Muddassir Iqbal was part of the team who conducted Army Public School operation on 16 December 2014. In this video he reveals that he along with other commandos was ordered to kill the innocent children inside school, when asked why should they kill children after killing all the terrorist he was told that it would be a chance to defame Taliban and get nation on the side. He and all other commandos killed children and later Taliban was blamed. Muddassir Iqbal has deserted the military and now he is  with mujahedeen somewhere in AF PAK border area” For authenticity of  this tape journalists can easy reach to his home town to interview his family members or   ISPR as he reveals his army service number” Asalam o Alaikum: My name is Muddassir Iqbal. My father’s name is Naimat Ali. I belong to Sialkot divison (Punjab province), my village is Shamsher Poor and district, tehsil and post office  Narowal. Unfortunately I was working in Pakistan army. I feel embarrassed to tell yo

RWR Advisory: Belt and Road at a Glance

This edition covers developments from March 12 - March 26..  Belt and Road at a Glance   Subscribe to the Belt and Road Monitor Top Developments China National Machinery Industry Corporation, commonly known as Sinomach, has agreed to  build  a $845 million, 255-mile railway across  Iran , building upon a sustained period of growth for Chinese investment in Iran that accelerated after Xi Jinping’s state visit to the country in January 2016. The railway will link the cities of Tehran, Hamedan and Sanandaj. China Civil Engineering Construction, a subsidiary of CRCC, is currently also  building  a 263-km railway line from Kermanshah to Khosravi. According to Chinese entrepreneur Lin Zuoru, who  owns  factories in Iran, “Iran is at the center of everything.”On March 23, China’s Ministry of Commerce announced that foreign direct investment by Chinese companies in 50 Belt and Road countries fell by 30.9% year-on-year. While the Ministry stated that this number covers investment across al

CPEC Jobs in Pakistan, salary details

JOBS...نوکریاں چائنہ کمپنی میں Please help the deserving persons... Salary: Salary package in China–Pakistan Economic Corridor (CPEC) in these 300,000 jobs shall be on daily wages. The details of the daily wages are as follows; Welder: Rs. 1,700 daily Heavy Duty Driver: Rs. 1,700 daily Mason: Rs. 1,500 daily Helper: Rs. 850 daily Electrician: Rs. 1,700 daily Surveyor: Rs. 2,500 daily Security Guard: Rs. 1,600 daily Bulldozer operator: Rs. 2,200 daily Concrete mixer machine operator: Rs. 2,000 daily Roller operator: Rs. 2,000 daily Steel fixer: Rs. 2,200 daily Iron Shuttering fixer: Rs. 1,800 daily Account clerk: Rs. 2,200 daily Carpenter: Rs. 1,700 daily Light duty driver: Rs. 1,700 daily Labour: Rs. 900 daily Para Engine mechanic: Rs. 1,700 daily Pipe fitter: Rs. 1,700 daily Storekeeper: Rs. 1,700 daily Office boy: Rs. 1,200 daily Excavator operator: Rs. 2,200 daily Shovel operator: Rs. 2,200 daily Computer operator: Rs. 2,200 daily Security Supervisor: Rs.