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The West launches to counter China’s Silk Road offensive

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The West wants to counter Chinese influence in developed countries by building infrastructure and deepening trade relations.

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During the G7 summit, which ended Tuesday in the German town of Elmau, the most developed countries confirmed that they intend to allocate US$600 billion to build them in low- and middle-income countries.

Of that money, the United States will contribute US$200 billion through public and private funds over the next five years, said the president of that country, Joe Biden, during this summit.

According to Biden, investments in infrastructure are “crucial” for sustainable development and for achieving “global stability”. The infrastructure macroplan was already proposed by the US president at the G7 summit that took place in the United Kingdom. And all this immersed in the midst of a dispute with Beijing for world hegemony.

Chinese initiatives

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One of the great reasons why the European Union (EU) and the United States have jumped into the arena of global infrastructure initiatives is because of what are known as New Silk Roads, one of the star projects of Chinese President Xi Jinping , with which China intends to weave an international trade network and extend its influence globally.

Born in 2013, the initiative has generated both enthusiasm for the development opportunities it entails and skepticism about the risks of excessive indebtedness and dependence on Beijing, as well as its opacity and its environmental consequences.

The accounts are still not entirely clear: according to a ‘think tank’ dedicated to the initiative within the Central University of Finance and Economics in Beijing, China allocated a total of US $ 755,000 million to investments in countries affiliated with the Routes between the year of its creation and June 2020.

That figure is still a long way from the most widely held estimates of the combined cost of all the agreed projects: between $1 trillion and $8 trillion.

According to the Shanghai Fudan University, although most of the investments in 2021 went to Asian countries, more and more is being dedicated to the Middle East or Africa, while South America is the region in which the construction activity of buildings is growing the most. agreed projects.

The Chinese authorities raise their chests for some projects of the Routes such as railway lines in Indonesia or Nigeria, ports in Sri Lanka or Greece, bridges in Bangladesh or Croatia and energy facilities in Chile, Russia or Bolivia.

Critics say, however, that the investment does not come for free and that, in return, the countries that receive it must commit to aligning themselves with Beijing’s position on various international issues.

The European Mobilization

The EU aspires to mobilize 300,000 million euros until 2027 in the development of infrastructure in Latin America, Southeast Asia and especially in Africa, a continent in which Brussels wants to allocate half of the funds.

The plan, known as the Global Gateway, primarily aims to counter China’s new silk road and will focus on promoting the ecological and digital transition in countries that want to be part of the project.

Thus, the EU could finance investments to produce green hydrogen or the installation of submarine cables that allow the exchange of data between continents, as explained by the president of the European Commission (EC), Ursula Von der Leyen, when she presented the proposal in December last year.

In addition, in Africa, it is planned to allocate, for example, 125 million euros so that the African Union achieves the objective of producing 60% of the vaccines that are inoculated on the continent by 2040, taking into account that African countries only manufacture currently 1% of those administered.

Brussels promises favorable financing conditions that do not generate unsustainable levels of debt, but in order to qualify for the funds, the recipients will have to respect the rights of workers, international standards on intellectual property, allow fair access to public tenders and commit, in general terms, to democratic values.

The EU wants to mobilize a total of 300,000 million euros thanks to the participation of financial institutions such as the European Investment Bank and the European Bank for Reconstruction and Development, different European foreign aid programs and the funds allocated by both the countries of the EU as well as the private sector.

And now the G7, led by the US.

The G7 will allocate US$ 600,000 million to a macro-infrastructure plan in low- and middle-income countries to counter China’s advance. It was one of the announcements made by President Biden during the summit that ends today in Elmau, a figure that is also included in the conclusions of the summit. Of that amount, Washington will mobilize US$200 billion through public and private funds over the next five years.

The US president pointed out that investments in infrastructure are “crucial” for sustainable development and to achieve “global stability”. The initiative, baptized as “Collaboration for Global Infrastructure and Investment”, aims to promote the development of low- and middle-income countries, strengthen the global economy and the supply chain.

Biden stressed that this plan focuses on areas such as health and health security, digital connectivity, gender equality, climate and energy security.

Within the framework of this plan, the president of the United States mentioned the creation of a submarine cable, which will link Southeast Asia with the Middle East and Western Europe, which has been awarded to the US telecommunications company SubCom.

The United States also wants to mobilize $335 million in investments to provide internet and financial technology in countries in Africa, Asia and Latin America.

It seeks to promote a Western replica and presents the infrastructure plan as “a collaboration between the great democracies to carry out a project guided by values, with high standards and transparency.”

Source: Gestion

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