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.
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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.
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.