General

The bimonthly website of the U.S. "Foreign Affairs" published an article on June 22 entitled "The United States Should Not Copy China's Belt and Road Initiative" by Charles Kenney and Scott Morris. The author points out that B3W is clearly an alternative to the Belt and Road Initiative proposed by the West, but has failed to make progress. The United States is notoriously bad at investing in and maintaining physical infrastructure at home, so it doesn't make sense for it to attempt infrastructure projects abroad.

For nearly a decade, U.S. policymakers have been anxious about the Belt and Road Initiative. The initiative is a massive infrastructure investment project through which China has funded and built bridges, ports, power plants, railways, tunnels and 5G networks around the world.

In June 2021, at the Group of Seven (G7) meeting held in the United Kingdom, US President Joe Biden announced the Western response to the "Belt and Road" initiative: "Building a Better World" (B3W). Biden promised that the plan would help "meet the enormous infrastructure needs of low- and middle-income countries." B3W is clearly an alternative to the Belt and Road Initiative proposed by the West.

However, B3W has failed to make progress since then. Even the name of the program was scrapped due to B3W's legislative failures. The program is being renamed the "Global Infrastructure and Investment Partnership" program. Still, in the spring of 2022, some B3W projects were announced in the United States. But they mean the Biden administration's combined efforts to renew global infrastructure is less than $6 million.

However, this poor performance is not a major loss, as B3W is the wrong way to compete with China in developing countries. The United States is notoriously bad at investing in and maintaining physical infrastructure at home, so it doesn't make sense for it to attempt infrastructure projects abroad. These projects are best left to the US-led multilateral economic institutions, namely regional multilateral banks such as the World Bank and the African Development Bank. In its bilateral competition with China, Washington should use its advantages, including its unparalleled higher education system. Educating the next generation of global leaders, rather than catching up with Chinese construction companies, would be a victory not only for America's global standing, but for the American economy as well.

The United States is at a disadvantage in the field of infrastructure

When the Biden administration launched B3W, officials were careful not to describe it as an effort to take on China head-on. They doubtless fear that this showcase global initiative will be seen as a purely defensive move. However, as one official said at the B3W announcement, "to date, we have not come up with a positive alternative that reflects our values, standards and way of doing things".

It's odd that the US has not offered a "positive alternative" in the past. In the past 10 years alone, the United States has launched the Power Africa program to power millions of African households, the Blue Dot Network with Australia and Japan to promote sustainable The "Energy for Development and Growth" initiative to expand access to energy in the Pacific region. These projects differ from the Belt and Road Initiative in that the U.S. commits very little money, and most of the money allocated is invested in private companies. Sadly, the current version of B3W doesn't change that at all.

It's not just size that puts the U.S. at a relative disadvantage in building infrastructure. China is better at building, not just at home but around the world. Chinese companies dominate competitive procurement by major infrastructure lenders such as the World Bank. They won $2.3 billion worth of World Bank-financed infrastructure contracts outside China in 2020, while the United States won only $27 million worth of contracts. Of the 20 largest construction contractors, 14 are in China, 6 are in Europe, and none are in the United States.

However, B3W's most serious flaw is that it appears to be based on a self-transactional capitalist model. A major component of the Biden administration's strategy for economic competition with China involves subsidies to U.S. companies. USAID spends most of its resources on purchasing goods and services from U.S. companies. The bipartisan Revive American Manufacturing and Innovation Act would also provide massive industry subsidies to boost U.S. semiconductor production.

To make matters worse, the U.S. response is being copied by its ally Britain. Prime Minister Boris Johnson is redirecting aid spending to projects that use "world-class British expertise", an approach the Foreign Office graciously described in May as part of its aid strategy. Perhaps other G7 members will follow, and the EU must be looking for ways to provide huge subsidies to European companies planning to invest in developing countries.

Advantages in attracting talents

If the government really wants to compete with China in bilateral global development, then the United States should use its own advantages: not the National Railroad Company, but the University of Ann Arbor; not the Port of Newark, but the University of Notre Dame. The U.S. higher education system is the envy of the world, producing business and political leaders in nearly every country in the world. China is trying to replicate this model, but the U.S. still leads the way in enrolling foreign students, many of them from China.

Undoubtedly, the U.S. government has neglected public research budgets in recent years, reducing the number of foreign students entering U.S. schools. The process began under President Donald Trump, but President Biden did not do enough to change course. This is a devastating mistake. A number of actions the Biden administration could take to address this mistake include shortening the wait time for an appointment to apply for a student visa (which can be as long as more than a year), providing scholarships for Americans to study and conduct research abroad, and for foreign scholars to come to the U.S. , and provide non-Americans with the opportunity to apply for federal student loans. In a show of support for international competition, the United States could also increase funding for companies that provide loans to students in low- and middle-income countries.

The great advantage of strategic competition based on human capital is that it will benefit the United States: in addition to demonstrating openness and building a network of compassionate global leaders, students who choose to study in the United States sometimes stay, Become a vital part of America's research and entrepreneurial capabilities.

Rather than trying to beat China at its own game, the United States needs to recommit to its vision of global prosperity through global cooperation, openness, transparency, and equality of opportunity. In terms of physical capital, the World Bank and regional development banks are best placed to achieve these goals. When it comes to human capital, the United States can and should lead the way in reopening its doors to students and scholars. This agenda is truly values driven, and B3W fails to do so.