G-7 Countries Offer Alternative to China’s Development Juggernaut

The world’s wealthiest liberal democracies say they’re offering developing nations $600 billion in infrastructure funding by 2027, providing what they say is a superior alternative to China’s massive, multi-trillion-dollar Belt and Road Initiative (BRI).

“What we’re doing is fundamentally different because it’s grounded on our shared values of all those representing the countries and organizations behind me,” said U.S. President Joe Biden during remarks in which the seven leaders of those democracies unveiled the proposal at the Group of Seven summit in Germany. “It is built using the global best practices: transparency, partnership, protections for labor and the environment.”

The G-7 plan, called the Partnership for Global Infrastructure and Investment, will focus on digital connectivity, gender equity, health security, climate and energy security – areas seen as not yet dominated by China’s investments.

A third of the funding comes from the U.S. and the rest from other wealthy G-7 nations – using modest government investments and establishing high standards designed to leverage private sector financing.

The initiative is a relaunch of the Build Back Better World plan, announced by G-7 leaders last year.

“The West had really been asleep at the wheel for a number of years on this use of connectivity – infrastructure connectivity as a means of extending foreign policy influence,” said Dan Hamilton, non-resident senior fellow at Brookings. “And so they are now coming together on a united project to sort of push this.”

Billed as better than China’s Belt and Road

It’s billed as a better alternative than China’s Belt and Road, which has been criticized as “debt-trap diplomacy” that Beijing employs to expand its influence.

Beijing slammed the initiative as a “zero-sum game approach.”

“We oppose the moves that advance geopolitical calculations and smear the Belt and Road Initiative in the name of promoting infrastructure development,” said Foreign Ministry spokesperson Zhao Lijian.

While the G-7 is focusing on areas where China isn’t so dominant, meeting Western environmental and labor standards may prove challenging for some developing countries.

“Due to the level of ease of Chinese investments – these are often quite attractive, because at the end of the day when you’re a developing country, you want the infrastructure now,” said Lucas Myers, program coordinator and associate for Southeast Asia at the Wilson Center’s Asia Program.

Robert Daly, director of the Kissinger Institute on China and the United States at the Wilson Center, told VOA that for the leading elites in some countries, China still offers a better deal.

“They’ll give you money now to elites in countries that can’t find any loans from any other sources,” he said. “Many of these countries have weak governance and are prone to elite capture, which is polite terminology for corruption. And China can get a road built, an airport built now, without the moral lectures that tend to come with Western lending, when Western lending is available at all.”

But, he said, China’s official policy of non-interference only goes so far when it comes to development.

“China likes to say that it does its lending, and it conducts its foreign policy, without interfering in other countries’ internal affairs,” he said. “But what China is finding is that development is interference. You don’t get a choice about that when you get involved in development. You pick sides politically, you pick winners and losers, you offend traditionalists, as the United States has, you tend to get in bed with elites who you don’t understand and whose reputations you don’t understand.”

Hamilton, of Brookings as well as a professor at Johns Hopkins University, told VOA that Western nations have tried something like this before – and it hasn’t come to much.

“One has to keep in mind, however, that last year they announced something very similar,” he said. “The EU had a Global Gateway initiative which really hasn’t amounted to a whole lot despite a lot of headlines … So one has to look hard at the real numbers rather than monies that are shifted around that are already there. We’ll have to see. It requires a really sustained effort on the part of these countries to help build infrastructure connectivity projects with, you know, weaker countries, more fragile countries across Asia at the same time that the Chinese are offering countering possibilities.”

In the nine years since it was launched, nearly 150 countries have signed up for China’s BRI – so far totaling more than 2,600 projects with a combined value of $3.7 trillion, according to data analysis firm Refinitiv.

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