U.S. races to counter China 'predatory' Belt and Road initiative

America and its allies are scrambling to establish a global infrastructure funding mechanism to counter the trillions of dollars China has spent to build projects and buy influence through what U.S.

officials describe as Beijing‘s “mercantilist” and “predatory” Belt and Road development lending initiative.

While the Biden administration is framing its efforts as a push to counter climate change, it has generally run with momentum that former President Donald Trump set in motion to compete with the flood of infrastructure loans China has been offering to low- and middle-income countries around the world over the past decade for new roads, bridges, ports and rail lines.

economy will depend heavily on the global appetite for infrastructure development, and that Washington‘s ability to steer funding toward such infrastructure is going to shape how much influence America has as a superpower over the coming decades.

global supply chains and public health infrastructure going forward, it must play a more aggressive role in drumming up the estimated $40 trillion the developing world is estimated to need for infrastructure projects by 2035, said White House National Economic Council Director Brian Deese.

and others in the Group of Seven industrial democracies of a new pro-transparency infrastructure funding paradigm called the “Build Back Better World” or “B3W” initiative.

and other democracies have struggled for years to come up with ways to counter China’s Belt and Road Initiative, which the communist government in Beijing rolled out nearly a decade ago as a springboard for its rising global influence.

A Council on Foreign Relations survey earlier this year detailed the sweep of the Belt and Road project already: “Thirty-nine countries in sub-Saharan Africa have joined the initiative, as well as 34 in Europe and Central Asia, 25 in East Asia and the Pacific, 18 in Latin America and the Caribbean, 17 in the Middle East and North Africa, and six in South Asia.

These 139 members of [the Belt and Road Initiative], including China, account for 40% of global GDP.”.

Belt and Road has worked around the International Monetary Fund and the World Bank, the bulwarks of the Western postwar economic order that were long the standard-bearers of global infrastructure financing prior to China’s arrival on the stage.

Chinese officials say the projects are win-win propositions, earning goodwill in countries across Southeast Asia, Europe, Africa and Latin America while generating construction projects for Chinese firms and infrastructure to create new trading routes and export opportunities.

officials and some private analysts have argued that Belt and Road involves “predatory” lending designed to ensnare poorer countries so China can later wring political and natural resource concessions in exchange for debt relief.

With regard to financial murkiness, however, a recent study by AidData, a research outfit at the Virginia-based College of William & Mary, found that Belt and Road is based on a “secretive overseas development finance program” that has saddled dozens of developing countries with nearly $400 billion worth of “hidden debt.”.

Also unclear is the extent to which B3W will coordinate with other initiatives already aimed at countering China, including the diplomatic and security alignment of the “Quad” countries — the U.S., India, Japan and Australia.

The U.S., Japan and Australia already announced two years ago the so-called “Blue Dot Network,” a transparency initiative aimed at assessing and certifying infrastructure development projects in Indo-Pacific and beyond.

International Development Finance Corporation aimed at triggering bigger private investments in foreign development projects.