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G7 summit announces infrastructure plan to counter China
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- The 48th Group of Seven summit started on Sunday in Bavaria, Germany. U.S. President Joe Biden announced
the Partnership for Global Infrastructure and Investment (PGII)
with other G7 countries at the meeting, pledging $200 billion for the partnership in five years. According to the PGII, the G7 would collectively mobilize $600 billion for a wide range of infrastructure projects during the same period.
- Apparently competing with China’s Belt and Road Initiative, the investment heavily emphasizes developing areas like Africa and Southeast Asia, with which China has long cultivated its relations. Among the investment are $2 billion for solar projects in Angola, $600 million for the Southeast Asia–Middle East–Western Europe 6 (SEA-ME-WE 6) submarine telecommunications cable, and $25 million for small-and-medium-sized enterprises in West Africa. The other investments include infrastructure for childcare, internet services, power system, climate sustainability, and healthcare.
- The three-day G7 summit and the upcoming NATO summit are held days after the Horn of Africa Peace Conference and BRICS Summit hosted by China. China’s Global Times commented
that the meetings led by the U.S. are “in stark contrast” to last week’s BRICS summit, where, according to President Xi Jinping, the countries “gather not in a closed club or an exclusive circle.”
- While the White House claimed
that Ukraine’s war with Russia was at the top of the G7 summit agenda, it appears that the China challenge is what it wants to address more. However, whether the infrastructure partnership would deliver remains to be seen. Biden unveiled the Build Back Better World initiative at the G7 summit a year ago to counter the Belt-and-Road model, and the initiative has reportedly gotten stuck.
- Biden’s proposal to cap the price of Russian oil could also be difficult to achieve, as they need to coordinate
with the Organization of Petroleum Exporting Countries (OPEC), the most powerful oil price influencer that is not always aligned with the G7, and the OPEC+ that includes Russia.
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China holds high-level dialogue among developing countries
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- China hosted a High-level Dialogue on Global Development (全球发展高层对话会) on the sidelines of the 14th BRICS Summit on Saturday. Attendees were BRICS leaders and heads of governments from potential BRICS+ members — Algeria, Argentina, Egypt, Indonesia, Iran, Kazakhstan, Senegal, Uzbekistan, Cambodia, Ethiopia, Fiji, Malaysia, and Thailand.
- China made a series of promises (Zh/En) as the chair to help the development of its partners. The promises, which are much smaller than the U.S. support for PGII in terms of the amount of the money, focus on creating cooperation mechanisms on a broad array of issues, including food, health, climate change, and digital development. However, neither the deadline for delivering these promises nor how to achieve them is clear.
- The lack of details and time frame of these promises will grant China more flexibility in execution. However, such flexibility could also mean a weaker effect. The goodwill of creating a more open global order addresses the concern of many developing countries, and conferences are nice to seek common ground. But they do not necessarily translate to actions to change. How China, as a less powerful state than the U.S., supports these countries matters. Winning trust is as important as enhancing strength for China when doing that.
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