Where the G7’s alternative to China’s belt and road loses its way

The appetite for alternatives to the belt and road is motivated by a perception that the initiative is somehow succeeding. But this assumption has not been properly scrutinised
If China is winning the narrative battle, then the EU and US must find the right story, not shout the same message louder

Jacob Mardell

Published: 9:15am, 22 Jun 2021

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We’ve already seen several initiatives portrayed by Western media as alternatives to China’s Belt and Road Initiative, but US President Joe Biden’s “Build Back Better World” (B3W) partnership is the first to be so explicitly framed as such by its sponsor.

At this stage, the B3W, unveiled at the G7 summit, is mostly rhetoric. No new funding has been announced, just the creation of a “task force” to report back with “proposals” in the autumn. Still, it’s a politically significant moment.

While the idea that there needs to be an “anti-Belt and Road Initiative” appears self-evident, this need is rarely scrutinised.

Europe has more targeted concerns about the initiative than the United States – we care about the threat the initiative poses to our power to set global standards and about the resilience of European companies in the face of Chinese state subsidies. In Washington, the logic is more along the lines of “anything China does, the US should do better”. But, on both sides of the Atlantic, we should be wary of competition for competition’s sake.

The usual reasons given for competing with the belt and road are that its projects create difficulties for host countries. The claim is that low standards, poor implementation and problems in project selection have led to unwarranted financial burdens on countries, as well as negative social, governance and environmental impacts. In contrast, the European Union and US approaches to connectivity emphasise sustainability and a rules-based, market-led approach.

02:35

Belt and Road Initiative explained

Beijing generally leaves more responsibility in the hands of host countries than Western partners. Where corruption and low standards prevail, this adherence to the “host country principle” causes problems.

The best solution is to provide transaction advice and capacity building for institutions so they can keep a better eye on projects.

Both the EU and US recognise this. For instance, the US Innovation and Competition Act authorises US$375 million for the “Infrastructure Transaction and Assistance Network”, a mechanism set up to help countries guard against failed projects.

However, the appetite for alternatives to the Belt and Road Initiative goes beyond a need to contain its failures, and is motivated by a perception that the initiative is somehow succeeding.

Western-led financial institutions and national bodies in Organisation for Economic Co-operation and Development countries established the norms in development finance. If these countries now feel the need to do something differently, it’s because of the perception that the belt and road is working in a way that their institutions are not.

02:29

Pakistan’s first modern metro opens in Lahore in US$1.86 billion project built with Chinese backing

But this assumption has not been properly scrutinised. No one has convincingly argued that the belt and road is succeeding, either as a development model or in terms of advancing Beijing’s strategic interests.

The US Innovation and Competition Act says the initiative advances Beijing’s security interests but provides no evidence for this claim. The US’ own narrative suggests the opposite – how does extending bad loans and damaging the environment advance Beijing’s strategic interests? The narrative that Beijing strategically ensnares countries in “debt traps” been thoroughly debunked by multiple studies.

Asia has wary welcome for G7’s answer to China’s Belt and Road Initiative

One could also suggest that China’s state-financed, infrastructure-led growth model provides the material for development that countries need, and which status quo actors have overlooked.

However, big loan-financed infrastructure projects are becoming rarer, suggesting Beijing may no longer be convinced by its own model. Ironically, the appetite for “belt and road alternatives” in the West has peaked at a time when Beijing is increasingly talking the same language as the West on sustainability and adherence to international norms.

Beijing also wants to diversify belt and road project finance away from risky sovereign lending. This is not just rhetoric, but a genuine reflection of China’s concerns about the initiative and renewed emphasis on “high quality” development.

01:25

Xi sets tone for future Belt and Road development at Beijing forum

One victory the Belt and Road Initiative can confidently claim is on the narrative battlefield. One of the biggest tranches of funding (US$1.5 billion) authorised by the US Innovation and Competition Act for countering China abroad is not to provide infrastructure or assistance, but for “countering Chinese influence”, principally through media, civil society and public diplomacy work.

Meanwhile, the EU’s approach to competing with the belt and road is focused on visibility and communicating its existing contributions to connectivity. Innovations such as the Global Europe fund are intended to streamline financial mechanisms, but they are mostly an exercise in better branding.

The B3W, although it could have found a better name that doesn’t ape the language of Biden’s domestic agenda, succeeds somewhat in this dimension. However, post-Trump euphoria may not be able to carry the “West is back” narrative.

There is a tendency in Europe to assume that the Belt and Road Initiative became so popular on the back of a strong propaganda apparatus. That gives undue credit to Chinese state media and overlooks the inconvenient truth that there is fertile ground in the Global South for anti-Western narratives.

If challenging the belt and road is mostly a narrative struggle, more needs to be done on both sides of the Atlantic to find the right story. It isn’t enough to simply shout the same message louder.

Jacob Mardell is an analyst at the Mercator Institute for China Studies

David Brown is on holiday