Can Biden beat Belt and Road Initiative?

Posted on : 2021-05-19 10:42 KST Modified on : 2021-05-19 10:42 KST
In a telephone conversation with UK Prime Minister Boris Johnson, US President Joe Biden proposed an infrastructure plan to counter China’s Belt and Road
UK Prime Minister Boris Johnson speaks to US President Joe Biden on the phone in January, congratulating Biden on his inauguration. (Twitter screenshot)
UK Prime Minister Boris Johnson speaks to US President Joe Biden on the phone in January, congratulating Biden on his inauguration. (Twitter screenshot)

China’s Belt and Road Initiative has always rattled the US’ nerves. The Barack Obama and Donald Trump administrations both responded in different ways — from tacit approval to rage and condemnation — to the initiative, and the way it embodies the old Chinese proverb that says the “rear waves of the Yangtze River drive on those before.”

But neither of them was able to slow the Belt and Road juggernaut, which stands as a symbol of China’s rise.

Current US President Joe Biden also appears to be in something of a quandary over how to respond to the initiative. In a March 26 telephone conversation with UK Prime Minister Boris Johnson, he proposed an infrastructure plan to counter China’s Belt and Road.

Biden told reporters after the conversation, “I suggested [to Johnson that] we should have, essentially, a similar initiative [to Belt and Road] coming from the democratic states, helping those communities around the world that, in fact, need help.”

The idea was that “the democratic states” should pool their money to provide infrastructure investment in developing economies.

Biden had also warned the day before that he did not plan to sit back and allow China to move past the US to become the most powerful country in the world. His reference to a potential Belt and Road response read as a continuation from those sternly worded remarks. It was a clear-cut illustration of how sensitively the Biden administration perceives China.

Belt and Road grows in scale

Referred to as a “new Silk Road” strategy, the Belt and Road Initiative first emerged on the scene in 2013, when Chinese President Xi Jinping proposed establishing an “inland Silk Road” in Kazakhstan and a “maritime Silk Road” in Indonesia.

Early on, it amounted to an infrastructure investment and development project that involved linking the modernized cities along China’s coast with underdeveloped cities inland and in the southeast, as well as with countries in South and Central Asia.

From these beginnings, it has mushroomed into a massive global project encompassing over 100 countries, from East Asia to Europe.

According to the financial information provider Refinitiv, over 2,600 infrastructure projects alone were being pursued in connection with Belt and Road as of mid-2020, including efforts involving railways, ports and expressways. The amount of money involved was estimated at around US$3.7 trillion.

Belt and Road has also been broadening into other realms besides investment in infrastructures such as railways and roads. It has come to include a “digital Silk Road” in such high-tech areas as communication networks, artificial intelligence, cloud computing, e-commerce, mobile phone payment systems and surveillance technology.

It further incorporates a “health Silk Road” element, which is focused on realizing China’s vision in the area of global health governance, and a “green Silk Road” element oriented toward renewable energy exports. These days, the “Silk Road” amounts to a Chinese trademark.

The worry that US strategists feel when they look at China’s Belt and Road policies was evident in an updated edition of the US Council on Foreign Relations report titled “China’s Belt and Road: Implications for the United States” published in March 2021.

“The Belt and Road Initiative (BRI), Chinese President Xi Jinping’s signature foreign policy undertaking and the world’s largest infrastructure program, poses a significant challenge to U.S. economic, political, climate change, security, and global health interests,” the report says.

The message is that China is using the Belt and Road project, and the massive amounts of capital behind it, as leverage to expand its strength throughout the world and achieve its vision of a “great rejuvenation of the Chinese nation.”

While the Obama administration did not present a clear response to Belt and Road, the Trump administration sought alternatives after it took office in January 2017. Then-Secretary of State Rex Tillerson alluded to a US version of Belt and Road, announcing plans to “expand transparent, high-standard regional lending mechanisms — tools that will actually help [Indo-Pacific] nations instead of saddle them with mounting debt.”

Visiting Japan in early November that year, Trump said that the CEO of the US Overseas Private Investment Corporation was “working with the Japan Bank for International Cooperation to invest in bold, new infrastructure projects,” adding that it was a “major development that will advance our shared interests in the [Indo-Pacific] region.”

This was also reflected in a joint statement by the US and Japan. But Washington and Tokyo’s idea of an alternative against China’s large-scale international infrastructure investment plan failed to gain much traction. For the most part, discussions focused solely on investment in energy.

A lot of that may have had to do with distrust and wariness toward the US and Trump’s “America first” approach. It was also a challenge to muster support after the US had bowed out of the Trans-Pacific Partnership (TPP).

More than anything, there would have been less of a need for a customized response to Belt and Road after Trump changed course and launched a full-scale trade and tariff war with China.

So the alternative fizzled, and the Trump administration spent its term denouncing China’s Belt and Road plan as “predatory policy” and “debt trap diplomacy.”

The US network CNBC reported that 12 Latin American and 10 Caribbean countries had joined Belt and Road between 2017 and 2019, as had most of the NATO members in Eastern and Southern Europe. The Trump administration’s Belt and Road response, the network concluded, had failed.

How will Biden replace Trump’s “all condemnation” approach?

Having taken over the baton from Trump, Biden has hinted at a need and vision for a response to China’s Belt and Road, but the specifics have yet to emerge.

He would face a challenge, however, in raising enough money from “the democratic states” to match China’s funding might. The massive economic damage done by the COVID-19 pandemic leaves the US and other countries in even less of a position to mobilize their internal capacities toward external targets.

Indeed, while Biden may have declared that “America is back,” an exhausted American public still favors “America first.” A Belt and Road-type program would require state finances to be mobilized in direct and indirect ways, and while the costs that Americans would have to pay are clear, the benefits are couched in abstract terms of “democracy” and “maintaining dominance.”

That political dilemma — the preference of domestic voters vs. the maintenance of international dominance — is also visible in Biden’s lack of a clear answer as to whether the US plans to return to the TPP – which has since been replaced by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – after Trump pulled out.

The emphasis on the value of “democracy” in calls for investment is also politically awkward from certain African and Asian countries. The conditions and interest rates for lending would inevitably be more stringent than China’s, making them unappealing as an economic incentive.

In particular, the Biden administration is following in Trump’s footsteps in sacrificing trust as the US’ selfishness when it comes to COVID-19 vaccines has become starkly apparent.

By Yi Yong-in, staff reporter

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