President Joe Biden’s government funding proposal falls well short of Chinese spending in supporting foreign infrastructure projects, despite Biden’s claims that his administration wants to “out-compete” China.
Biden’s budget includes $2 billion for hard infrastructure projects around the globe, which are part of a subsection on “addressing pressing global challenges” and trying to “out-compete China.” However, that number is dwarfed by China’s Belt and Road Initiative, which invested nearly $30 billion into projects in the first half of 2022 alone.
Just last year, estimates for the total spent by China on Belt and Road crossed $1 trillion in just a decade since the initiative was launched in 2013. Spending slowed in 2022, but still hit $28.4 billion in the first half of the year after totaling $29.6 billion during the same period in 2021.
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Belt and Road is about more than building bridges and ports in the developing world. Experts have characterized it as the bedrock of Chinese President Xi Jinping’s foreign policy, and a key way Beijing has wrapped its tentacles around Latin America, Africa and Asia by indebting developing countries to Chinese creditors and cultivating loyalty by investing in fledgling economies.
The results of Xi’s diplomacy-by-investment are apparent. The Solomon Islands signed a key defense deal with China last year, against vocal objections by the United States. Honduras just this week changed its diplomatic allegiance from Taiwan to mainland China. Former President of The Philippines Rodrigo Duterte ceded claims in the South China Sea to Beijing after receiving Belt and Road investment.
China’s trade with Belt and Road countries has doubled since the project began to more than $2 trillion in 2022.
The United States, of course, invests in foreign infrastructure projects, and $2 billion is no small sum. However, it pales in comparison to China’s investment in terms of raw expenditure.
The Biden administration claims to be counteracting that by being more strategic with its money and doing a better job where it does invest: “I think it’s important to differentiate between quantity and quality,” Acting Deputy Secretary of State for Management and Resources John Bass said at a State Department press briefing last week, when asked about the disparity in spending between the two governments.
“We are not looking to match China dollar for dollar, in part because any number of Chinese investments – or, quote/unquote, “investments” – don’t make a lot of commercial sense,” he said. “And so if we’re trying to do this in a thoughtful way that reflects economic norms and good business practice, we need to be supporting a proper evaluation of some of this on the merits.”
State Department Spokesman Ned Price added that Washington can win by “harnessing the power of the American private sector.” (RELATED: REPORT: Xi Jinping To Meet Putin, Zelenskyy Days After Brokering Crucial Diplomatic Deal)
Other budget priorities aimed at China include $2 billion to bolster economic competitiveness and supply chains in the Indo-Pacific, $400 million for the Countering PRC Influence Fund and $9.1 billion in deterrence investments by the Department of Defense in the region.
Still, the Biden administration maintains that its strategic objective is not to suppress or limit China, rather to “out-compete” them and offer the developing world a superior choice to partner with.