Why China should watch out for the impact of US infrastructure plans
South China Morning Post
4 min read
China needs to keep an eye on massive US-led infrastructure plans as Washington and its allies step up efforts to steer standard-setting and counter Beijing's economic influence in the developing world, a Chinese scholar has warned.
Chen Wenxin, a Beijing-based US studies expert, also said China needed to closely watch the long-term economic edge the US might gain from its new US$1 trillion infrastructure improvement plan, even though domestic political divisions remained "the biggest stumbling block" in the short run for US President Joe Biden and his team.
The assessment from Chen, deputy director of the Institute of American Studies at the China Institutes of Contemporary International Relations (CICIR), came as he studied the US infrastructure agenda signed into law by Biden last November.
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The plan will disburse billions of dollars to state and local governments over five years for much-needed upgrades to ageing roads, bridges, rails and airports, as well as improve public facilities such as water systems, high-speed broadband and power plants. Biden has said the drive would help the US regain its competitive edge over China.
Overseas, Biden has teamed up with G7 leaders to create the "Build Back Better World" (B3W) plan, aiming to offer hundreds of billions of dollars in loans to developing countries as a counter to China's Belt and Road Initiative - a multi-trillion-dollar global infrastructure and investment programme launched in 2013 that has drawn criticism for its alleged debt trap risks and lack of transparency.
The B3W also comes at a time when China is competing with the US and its allies in setting international rules, including industrial protocols in emerging technologies that will shape the future economy.
The Group of 7 initiative is the US-led bloc of rich democracies' first comprehensive response and direct challenge to China's belt and road, and will rely largely on private-sector capital to target the US$40 trillion in infrastructure funds that developing nations will need by 2035.
Instead of traditional infrastructure, the B3W's offer of "a values-driven, high-standard and transparent infrastructure partnership" targeted new areas such as climate change, health and health security, digital technology, and gender equality, Chen noted.
"B3W focuses more on intangible aspects such as rules and standards, than on tangible infrastructure development," Chen wrote in a study published in Contemporary International Relations, an academic journal run by the CICIR, one of China's most influential foreign policy think tanks.
US officials launched a series of B3W "listening tours" since the plan was unveiled last June, and said in November that some 50 partner countries had been identified in Latin America and Africa alone.
Back home, however, as the Biden administration ramps up efforts to advance its legacy-defining infrastructure agenda, how far it will go - given the deep and bitter divide in American politics - remains to be seen, according to Chen.
Neither Republicans nor Democrats would want to "give up the political cake to the other easily", as public infrastructure improvements usually drew support from the American public, Chen wrote.
"The biggest political danger for the Biden keystone plan is that pushback from political opponents will intensify if the high-debt, high-inflation situation continues, especially in the context of the 2022 midterm elections, and the future [of Biden's infrastructure plan] would be in doubt if the Republicans regain control of Congress," he wrote.
US President Joe Biden signs the infrastructure bill into law on November 15, 2021. Photo: AFP alt=US President Joe Biden signs the infrastructure bill into law on November 15, 2021. Photo: AFP>
This is not the first time that the US has launched massive infrastructure programmes within its borders.
The railway construction boom in the 1830s opened up the American West to more rapid development, and president Franklin D. Roosevelt's 1930s Works Progress Administration deal helped not only to produce jobs during the Great Depression but also more than a million kilometres (621,000 miles) of roads, over 75,000 bridges, and at least 800 airports, laying the foundation for the future prosperity of the US.
There was also president Dwight Eisenhower's Federal-Aid Highway Act of 1956, which built some 66,000km of interstate highways in the largest US public works programme until then, and Bill Clinton's "information superhighway" - credited with having done for data flow what the transcontinental railroad and interstate highway system had done for goods and people flow.
"All have had a profound impact on the economic structure, social structure, technological innovation and even the way of life in the United States, greatly enhancing the country's national competitiveness," Chen wrote.
