G7 Launches Challenge to China’s Belt and Road | HK Wealth

G7 Launches Challenge to China’s Belt and Road

You may already be familiar with China’s Belt and Road initiative. Following the recent G7 summit in Cornwall, it may now have a competitor, as the leaders backed Joe Biden’s plans for a green infrastructure project to rival Chinese Premier Xi Jinping’s pet project. G7 Launches Challenge to China’s Belt and Road

What is the Belt and Road? 

The Belt and Road is a multi-billion dollar infrastructure initiative; a strategy to connect Asia with Europe and Africa through land and maritime networks to improve trade and stimulate economic growth. Critics of China may see it as a campaign for global dominance. Confusingly, it comprises a “belt” of overland corridors, and a “road” of shipping lanes, stretching into Europe, Africa and Asia, taking in more than 100 countries, half the world’s population and a quarter of its GDP.

Estimates of how much money has been spent and will be spent vary widely: the popular figure is the round $1tn (£721bn) with Chinese companies now engaged in construction work around the world on an unparalleled scale.

What are the G7 countries planning? 

Very clearly, the Belt and Road initiative is focused on trade, commerce and influence. It is emphatically not a green initiative: domestically, China is planning to build 78 domestic airports over the next ten years, and that is where it differs from the G7 plans.

Biden’s plan is the Build Back Better World (B3W) initiative, with one US official saying, “This is not about confronting or taking on China, but until now we haven’t offered a positive alternative that reflects our values, our standards and our way of doing business.”

The G7 sees B3W as part of a broader push to challenge China on human rights, Taiwan, Covid-19 and global warming. That may well prove to be one of the weaknesses of this “clean, green initiative.” It is entirely possible that some potential partner countries may have different priorities regarding human rights and the climate.

In addition, splits may develop among members of the G7. Germany, France and Italy want B3W to support activities in Africa. The US wants a focus on Latin America. Japan favours concentrating on the Indo-Pacific region. Given the history of some of these nations in the areas they wish to focus on, it begs the question of whether their desired recipients will welcome their efforts at all.

So, actually implementing the plan may be more difficult. In addition a change of leadership in the US could completely derail it. While many developing countries have misgivings about the Belt and Road, Montenegro for example, a NATO member and a country hoping to join the EU, is the latest to struggle to repay Belt and Road debts to China, for now they may see it as the best option. That leaves the G7 with some serious catching up to do.







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Garry Hale
Garry Hale
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