US seems resolute on containing China’s influence 

The US happens to be going all hammer and thongs in its latest bid to counter Chinese influence around the globe. The G7 group of rich democracies, led by the US, on Sunday, 26 June 2022, made a bid to countervail China’s formidable Belt and Roads Initiative (BRI) by announcing some USD 600 billion for global infrastructure programmes in poor countries. 

The Partnership for Global Infrastructure and Investment, unveiled by US President Joe Biden and G7 allies from Canada, Germany, Italy, Japan, UK and France, plans to end Western dormancy by making huge investments in key areas, in fact, everything from roads to harbours, around the world, something that China has had a massive head start in undertaking. 

US President Joe Biden said the target was for the United States to bring USD 200 billion to the table, with the rest of the G7 to fund another USD 400 billion, by 2027. 

Highlighting the geostrategic thinking behind the plan, Biden said such projects “deliver returns for everyone, including the American people and the people of all our nations.” Around the world, the role of China’s democratic rivals is “a chance for us to share our positive vision for the future” and for other countries to “see for themselves the concrete benefits of partnering with democracies,” he said. 

European Commission chief Ursula von der Leyen echoed this, saying “it is up to us to give a positive, powerful investment impulse to the world, to show our partners in the developing world that they have a choice,” in a veiled reference to an option to go to, other than China. 

Between now and 2027, the US government and allies will aim at the USD 600-billion figure through grants, federal financing, and leveraging private sector investments, the White House said. 

“This will only be the beginning: the United States and its G7 partners will also seek to mobilise hundreds of billions in additional capital from other like-minded partners, multilateral development banks, development finance institutions, sovereign wealth funds, and more,” it said. 

The G7 move comes close on the heels of a concerted US attempt to propitiate the Indo-Pacific region, a region that has, in recent times, been witnessing intense rivalry between the US and China for garnering influence.  

US President Joe Biden hosted leaders of the Association of Southeast Nations (ASEAN) in Washington in May 2022, which was followed by his visit to Tokyo, Japan for the Quadrilateral Security Dialogue (Quad) meet, and also to Seoul, Korea. In addition, he launched the Indo-Pacific Economic Framework (IPEF) in the same month. 

The IPEF is a group of 12-member countries, including India, Japan, Australia, Korea, New Zealand and a handful of ASEAN nations, that seeks to set international rules on the digital economy, supply chains, decarbonization and regulations applying to workers. 

It is not a free trade agreement; and it is not a security pact, like Quad or AUKUS. But it can definitely be termed as a move by the US to raise its economic profile and create another counterbalance to China within Asia. It’s a broad plan designed to help expand the US′ “economic leadership” in the Indo-Pacific region. 

Characteristically, the formation of the IPEF, like the US Indo-Pacific strategy, came in for much excoriation from the Eastern superpower. China’s Foreign Minister Wang Yi, on 22 May 2022, lambasted the formation of the IPEF, and asked if the framework was “a political tool for the US to maintain regional economic hegemony and deliberately exclude specific countries”. “Is the U.S. politicising, weaponising, and ideologising economic issues and using economic means to coerce regional countries to choose sides between China and the US?” he said to reporters, adding that “attempts to create camps, a NATO or Cold War in the Asia-Pacific will not succeed.” 

To add to China’s discomposure, Quad members (the US, Australia, India and Japan), in May 2022, committed USD 50 billion for sustainable and demand-driven infrastructure in the Indo-Pacific and announced an Indo-Pacific Maritime Domain Awareness (IPMDA) surveillance initiative to combat illegal fishing by the Chinese. 

The IPMDA initiative is a new dimension to the state of vigilance in the Indo-Pacific. The IPMDA will share commercially available satellite data and alert smaller Southeast Asian states if there are territorial intrusions or if ships carry out illicit activity such as illegal fishing, smuggling or piracy in waters within their maritime boundaries. 

As it is, the US has made serious inroads into Chinese BRI territory of Nepal through its Millennium Challenge Corporation (MCC) USD 500 million grant to improve Nepal’s power and other infrastructure. Nepal’s parliament ratified the MCC – Nepal Compact, on 27 February 2022, after years of debate over the cost and benefit of the compact for the country. China, in turn, did its utmost to cripple the US initiative in Nepal, in the wake of its own stalled projects in that country, that are, in fact, losing popularity.  

The MCC was envisaged by the US in the aftermath of the 9/11 attacks as a safeguard against perceived terror threats from the least developed countries (LDCs) by ensuring economic development. It was an excellent opportunity for such countries to secure interest-free funds to supplement their socio-economic development. 

The MCC is becoming an increasingly singular weapon by the US to propitiate lesser developed countries, and bring them under its sphere of influence. Considering that China’s BRI lends at commercial rates and at short payback periods, the US MCC interest-free funding is a welcome alternative.   

The MCC aims to deliver on its mission to reduce poverty through economic growth, including responding to opportunities in countries in the strategic areas of climate, inclusion and gender, and catalysing private sector investment. It had a budget of over USD 900 million for the years 2020, 2021 and 2022 each. It is involved in around 62 countries. 

This effort, however, pales in comparison to the colossal strides made by the Chinese BRI. Over the last 18 years, China has granted or loaned money to 13,427 infrastructure projects worth USD 843 billion across 165 countries. China’s BRI is one of the largest infrastructure and investment projects in history, covering 65% of the world’s population and 40% of the global gross domestic product as of 2017. 

 The US and its Western allies are indeed coming into the fray with their financing initiatives a little too late. The Chinese BRI has been around for several years and it has made a lot of cash disbursements and investments, giving it a solid head start. But, perhaps, for the US and its allies, it is never too late; and their attempts should not misfire, particularly if they become a matrix for earnest and meaningful development. Many recipients of China’s BRI, in fact, are going through what may be termed as feelings of misgivings at China’s aggressive self-seeking ways – that Beijing is more interested in achieving economic and geostrategic mileage rather than mitigating their problems. 

For developing countries of the world, the new US and Western initiatives should be a welcome option, fully aware that China has used its massive economic clout to garner selfish advantages for itself and to set up surreptitious debt traps with the intent of foreclosing huge assets in recipient countries.