G-7 infrastructure plan won’t stop China’s Belt and Road initiative, CSIS says
The wealthy countries of the Group of Seven have agreed to put in place an infrastructure plan to compete with China’s Belt and Road Initiative, but that will not stop Beijing’s massive program, an expert said on Monday. global economic governance.
G-7 leaders meet at three-day summit in the south-west of England which ended on Sunday – their first face-to-face meeting in two years. The group’s infrastructure plan is part of a larger collective movement against China on issues ranging from human rights violations to non-business practices that undermine fair competition.
“It’s not really meant to stop Belt and Road. But I think the G-7 is signaling that they want to offer an alternative that really revolves around two big things these countries offer,” said Matthew Goodman, senior vice president of economics at the Washington DC-based think tank Center for Strategic and International Studies.
The Belt and Road Initiative is China’s ambitious program to build physical and digital infrastructure to connect hundreds of countries in Asia to the Middle East, Africa and Europe. Critics see Chinese President Xi Jinping’s foreign policy as expanding his country’s global influence.
Goodman, who also holds the Simon Chair in Political Economy at CSIS, told CNBC “Squawk Box Asia“that the G-7 could make a” significant contribution “to closing the infrastructure gap in the world by channeling investment to developing countries.
In addition, the Seven Wealthy Democracies would provide better guarantees for infrastructure projects – including transparency, accountability as well as environmental and social standards, Goodman said.
“I think that’s what they’re trying to point out here. Whether they can succeed or not is another story, it’s a very difficult business,” he added.
The United States and many countries have criticized the Belt and Road plan, accusing Beijing of leaving participating countries burdened with unsustainable debt, while benefiting Chinese companies, many of which are state-owned. In addition to the environmental damage of the program, critics have also questioned the transparency of the agreements.
China featured prominently in a statement issued by the G-7 on Sunday. The G-7 countries are Canada, France, Germany, Italy, Japan, United Kingdom and United States
In addition to denouncing alleged human rights violations and China’s non-market policies, the G-7 has also called for more transparency on the origins of the Covid-19 pandemic. They stressed the importance of peace and stability in the Taiwan Strait and expressed concerns about tensions in the East and South China Sea where China has overlapping territorial claims with its regional neighbors.
Beijing angrily responded to the statement on Monday.
The Chinese Embassy in the UK has said it strongly opposes the G-7 statement and is highly dissatisfied. In a statement in mandarin translated by CNBC, the embassy urged the United States and other G-7 members to stop slandering China and interfering in Chinese internal affairs.
Ahead of the release of the Chinese embassy statement, Goodman said Beijing should not be surprised at the G-7’s backlash. He said the group wanted to show democratic nations working together to tackle global challenges, unlike authoritarian rivals such as China and Russia.
“I think the tone was pretty clear on the concerns of these big seven advanced market economies about China, its economic coercion, its non-market policies, its human rights abuses,” Goodman said.
“And I think it was well telegraphed as the summit approached, so Beijing shouldn’t be surprised.”