China, Geopolitics, and the Global South
Uwe Hoering, June 2021
The label for the multilateral copy of China’s New Silk Roads recently announced at the G7 summit by U.S. President Biden is gruesome: Build Back Better World, or B3W. But it is certainly not more gruesome than the official designations One Belt, One Road (OBOR) or Belt and Road Initiative (BRI) for the original. Most media outlets gleefully-affirmatively embraced the “positive vision” the White House wants to open up for the countries of the Global South as yet another sign that the “major democracies” are back on the world stage as a collective actor. As a “values-driven, high-standard, and transparent infrastructure partnership” it is to compete with China’s infrastructure activities, which are regarded as indecent and harmful for recipient countries. So far, however, B3W is merely an anaemic PR product – and it will probably remain that way for a long time.
The confrontation with China has been escalating for some time now in many areas – trade wars, sanctions, rearmament, the Corona narrative, …., and now also with Beijing’s showpiece for China’s economic and political expansion. With a massive infrastructure and investment program, B3W, much like BRI, intends on the one hand to meet the still immense needs of the countries of the Global South and to be instrumental in making up for the economic setbacks caused by the Corona pandemic. At the same time, it is to demonstrate the merits of “Western values” as the driver of growth and prosperity against its systemic authoritarian opponent: transparency, value orientation, high quality standards, corruption-free and climate-friendly, implemented “through consultation with communities and assessing local needs as a true partner”. Four areas are highlighted in particular to score points against Beijing: Climate action, health system, digitalization, and gender equality and equity.
B3W is a follow-up to the Blue Dot Network from the times of Donald Trump: The idea was to attract investors for “market-driven, transparent and financially sustainable development projects” through certification according to Western standards – a blatant jibe against Chinese projects, which are frequently dismissed as substandard, intransparent and lacking in participation. Without any significant funding, however, BDN remained a publicity stunt. This time, after all, the U.S. government is announcing a lot of money: B3W “will collectively mobilize hundreds of billions of dollars for infrastructure investments in low- and middle-income countries in the coming years.” How much that will actually be remains unclear for now, as do the terms of the award or specific projects.
Who is going to pay for it?
But problems already start with the money, with financing. While Beijing can now pump the billions it earned as the ‘workbench of the world’ by supplying the U.S. and the West with consumer goods into the BRI projects through its state development banks, B3W, faced with immense government spending for its own Corona bailout programs, wants to tap the private sector and pension funds, lured by government development money. Such Public-Private Partnerships already have rarely worked in the past because these investments are far too risky for corporations and, at best, only profitable in the long run. Moreover, the U.S. government is struggling with getting its domestic infrastructure program plans through the U.S. Congress: “Given fiscal and political constraints, Washington will never put the kind of public resources behind foreign infrastructure projects that Beijing can,” Matthew Goodman of the Centre for Strategic and International Studies (CSIS) in Washington, D.C., is convinced.
Another open question: who will implement these projects? While the West went into an investment coma after the 2007/2008 financial crisis, infrastructure corporations from China have captured the international market. In Africa, they secured 60 per cent of all contracts, and 40 per cent in Asia, where there is strong competition from Japan. China’s Silk Road successes are not only due to Western hesitation, but also to robust and risk-taking capitalist corporate power that can deliver turnkey projects from planning to financing to operation from a single source. The popular reference at this point to their massive support from state finances and politics is hypocritical in view of the billions in state aid and protectionist measures with which Western corporations have just been rescued and are to be made competitive.
Moreover, there is limited enthusiasm among targeted democratic partners to be harnessed to economic and geopolitical competition and demonstrations of “U.S. competitiveness abroad.” Japan announced its own Silk Road copy in 2017 together with India, the Asia-Africa Growth Corridor, although its contribution to development, connectivity, and cooperation between the continents is still a work in progress. The European Union also has ambitious plans and substantial vested interests. Among other activities, it has been for some time crafting an EU-Asia Connectivity Strategy – again with rather sluggish progress. It is doubtful whether outcomes will improve if several lame ducks join forces, which is what Biden would like to see.
The dragon in your hand …..
For the time being, most countries in the Global South will also not trust the B3W roast as long as Beijing continues to play its cards smartly. After all, while the prospect of benefiting from an uncertain future on unknown terms is dubious, the New Silk Roads’ tangible results are always more at hand than possible worries about underlying geopolitical motives. Furthermore, BRI is much more than just an infrastructure program and also includes trade agreements and cultural projects, political recognition and upgrading, even of corrupt, authoritarian regimes, and can boast undeniable successes with the ‘Model China’. A dragon in your hand is better than an eagle on the rooftop, varying a German proverb.
And yet the United States was originally ahead in the game: Ten years ago, then U.S. Secretary of State Hillary Clinton announced an ambitious infrastructure and development program for Afghanistan and the region in an attempt to support a withdrawal of troops with economic prospects. The name: New Silk Roads. Implementation did not progress, and in the meantime the Chinese have captured the attra brand name for their Belt & Road Initiative.
After all: BRI is pushing the ‘Western community of values’ to step up its offers to the countries of the Global South. But it must put significantly more material values on the global poker table beyond its idealistic values and come up with more than PR-driven promises and announcements to dispel the reasonable doubts about the ‘positive vision’. First of all, it should possibly come up with an appealing brand name. How about, for instance, ‘New Highway to Heaven‘, abbreviated: NH2H?
Translated with www.DeepL.com/Translator (free version)