G7 touts $600 bn global infrastructure plan to rival China

Elmau Castle, Germany – (AFP)

The G7 group of rich democracies on Sunday announced an attempt to compete with China’s formidable Belt and Road Initiative by raising some $600 billion for global infrastructure programmes in poor countries.

The Partnership for Global Infrastructure and Investment, unveiled with fanfare by US President Joe Biden and G7 allies from Canada, Germany, Italy, Japan and the European Union, aims to fill a huge gap left as communist China uses its economic clout to stretch diplomatic tentacles into the furthest reaches of the world.

Biden said the target was for the United States to bring $200 billion to the table, with the rest of the G7 another $400 billion by 2027.

Funding the kinds of projects that China currently dominates — everything from roads to harbours in far-flung corners of the world — is not “aid or charity,” Biden said.

Highlighting the geostrategic thinking behind the plan, Biden said such projects “deliver returns for everyone, including the American people and the people of all our nations.”Although China was not referred to by name, the rivalry loomed large over the leaders’ presentation, a relaunch of a first attempt at a Western infrastructure fund that Biden laid out during last year’s G7 summit in Britain.

Unlike China’s state-run BRI initiative, the proposed G7 funding would depend largely on private companies being willing to commit to massive investments and is therefore not guaranteed.

According to US officials, however, that is a good thing.

In this capitalist vs communist scenario, US officials say, recipient countries will be able to avoid the debt traps and other strongarm tactics allegedly used by the Chinese.