Amid the challenges posed by Russia’s war against Ukraine and China’s increasing assertiveness in Asia, the G7 met in Europe. Most of the hard work was completed by staff before the political leaders gathered. Even so, some of the ideas advanced remained half-baked at best, such as the Partnership for Global Infrastructure and Investment initiative, apparently a Biden administration brainchild. It is supposed to uplift developing countries, create jobs in industrialised nations and provide a return on private investment. Next up: achieving global peace and making the lion and lamb lie down together!
Driving the PGII is ‘the China threat’. The People’s Republic of China supposedly is about to take over the world with its Belt & Road Initiative. Poor nations will be impoverished through ‘debt-trap’ diplomacy, the PRC will control vital projects around the world, and facilities with military uses will be constructed covertly. Thus, the US and West must respond, tossing their people’s money at the same sort of overseas projects, saving the foolish and irresponsible locals from themselves and defeating the Chinese communists.
It is a dubious idea in the best of circumstances.
Beijing should not be underestimated, but it is not the 800-pound gorilla often portrayed. Political interference in the economy is rife, government enterprises swallow vast resources, banks are saddled with heavy debt, a property bubble threatens, young people increasingly want to leave the PRC, draconian Covid restrictions undermine regime support, and the rapidly aging population poses potential demographic and economic disaster. Despite the expectation that Xi will win a third term as president, his political position could be simultaneously on the mountaintop and at the abyss, as dissatisfaction rises over endless Covid lockdowns.
“Focusing on developing states whose governments tend to be both authoritarian and dirigiste limits the likelihood of well-developed and -managed projects”
However ambitious the PRC’s BRI programme might have originally been, Beijing appears to have moderated its expectations. Focusing on developing states whose governments tend to be both authoritarian and dirigiste limits the likelihood of well-developed and -managed projects. Moreover, argued the University of Tennessee’s Sara Hsu, there is “no evidence that Chinese banks over-lend or invest in loss-making projects to obtain a foothold in those countries”.
So far the PRC has not amassed a network of foreign bases, and Chinese business practices have generated various forms of blowback in nations as diverse as Malaysia, Zambia, Sri Lanka, Pakistan, and Burma/Myanmar. Indeed, many nations have suffered through an ‘Ugly Chinese’ syndrome akin to the fabled ‘Ugly American’ during the Cold War. BRI is not the geopolitical juggernaut that many in the West feared.
Alas, President Joe Biden appears committed to his earlier plan of fighting inflation by spending more money. The idea of delivering a foreign financial bonanza came to him a year ago. According to the White House fact sheet:
At the 2021 G7 Summit, President Biden and G7 leaders announced their intent to develop a values-driven, high-impact, and transparent infrastructure partnership to meet the enormous infrastructure needs of low- and middle-income countries and support the United States’ and its allies’ economic and national security interests. Over the past year, members of the Administration have traveled to hear directly from countries on how we can meet their infrastructure needs, deepened our coordination across the US Government and with the G7, honed our infrastructure investment tools, and closed game-changing deals.
What did all this alleged listening yield?
