July 20 – 21, 2022

Speech of Dr. Ezzat Saad, ECFA Director, at the Plenary Secession

At a time when China has taken a leading and responsible position in development aid and financing for development, as exemplified by the Belt and Road Initiative, the Asian Infrastructure Investment Bank (AIIB), and more recently, President Xi’s new initiative, the Global Development Initiative, successive U.S. administrations have sought to thwart these initiatives through intensive campaigns and pressure started by Obama administration, which failed to persuade its allies and partners to boycott AIIB. When Trump came, one week after entering the White House, he abandoned the agreement coined by the Obama administration, “the Trans-Pacific Partnership”.

The West merely criticized China without offering anything on its part or even acceptable alternatives to developing countries. Just on June 26, 2022, the G-7 Summit unveiled a plan to mobilize $600 billion in private and public infrastructure investments in low- and middle-income countries over the next five years, the Partnership for Global Infrastructure and Investment (PGII) President Biden promised funding of up to $200 billion. According to Biden: “This isn’t aid or charity … it’s an investment that will deliver returns for everyone.”

The G-7’s announcement of the plan, which came just two days before the NATO summit, deemed China a “threat” in its final statement. As we know, the summit was attended, for the first time, by the leaders of Japan, South Korea, Australia and New Zealand. A few days earlier, the United States, and four of its closest allies, launched another initiative under the slogan “Partners in the Blue Pacific Pact” aiming at undermining the Chinese influence in the Pacific islands.

Some Western officials have indicated that the PGII will not directly compete with the BRI, as the latter focuses on the so-called hard infrastructure such as ports and railways, while the G-7 plan targets the “soft” infrastructure of the BRI countries by prioritizing climate, energy security, digital connectivity, health and women’s equality. Moreover, while the Chinese program is primarily concerned with loans from state-controlled banks, the PGII will use limited government resources, to attract large private investment.

Yet American analysts have asserted that the initiative is a clear alternative to the Belt and Road Initiative, and that it serves Washington’s competitive policy toward China, which is summarized by the motto “invest, align, compete.”

According to a Chinese expert (Wang Yongzhong) from the Chinese Academy of Social Sciences, the G-7 plan’s focus on “soft” infrastructure, in which its members have comparative advantages, means that Western countries’ goal is to boost their exports of technology and services in areas such as 5G telecoms and clean energy development, which allows them to make significant geopolitical and economic rewards.

In fact, Western experts believe that the G-7 plan is a repackaging of a concept that was originally floated under the name “Build Back Better World” and was launched by the G-7’s summit last year.

It should also be noted that the G-7 plan finds its origins in an initiative launched in 2019 under the name “The Blue Dot Network”, involving the United States, Japan and Australia, which has not been successful because of the different positions of the parties on climate change.

The G-7 plan overlaps with the “Global Gateway Scheme” launched by the EU in December 2021 to mobilize €300 billion in infrastructure investment by 2027, as well as another UK initiative, “Clean Green Initiative”, unveiled by London in November 2021, worth $4.1 billion for sustainable infrastructure in developing countries.

According to some Western experts – such as Matt Ferchen of the Center for Asia at the University of Leiden in the Netherlands – the above mentioned Western initiatives are “just too little, too late.”

While Western officials point out that these initiatives complement each other, Western experts point out that inflation and domestic politics in the major Western countries will restrict the funding that governments will provide, and the private sector in these countries will be very reluctant to invest in unstable developing countries, unlike China, which looks at the issue differently, believing that the solution to all the challenges facing Africa is development, and that the lack of security is due to insufficient sustainable development. Similarly, China’s guiding idea of building peace by fostering development is attractive enough to represent a sustainable solution to the region of the Middle East; where China calls for respecting the development rights of the Middle East countries, and facilitating the construction of major infrastructure projects to strengthen people’s livelihood and enhance the governance capability of target countries through development cooperation. In this regard, China uses the Belt and Road Initiative as a platform for regional infrastructure connectivity and a community of shared interests to gradually realize regional peace.

Last but not least, China’s Global Development Initiative (GDI) was launched by President Xi Jinping on September 21, 2021. In a speech at the General Debate of the 76th Session of the UN General Assembly, President Xi stated that, in the face of the severe shocks of the coronavirus pandemic, the world needed to work together to steer global development toward a new stage of balanced, coordinated, and inclusive growth. The GDI which was warmly welcomed by most of the Developing Countries was meant to achieve those objectives as well as the United Nations’ 2030 Agenda for Sustainable Development.

The conclusion is that experience with Western countries never inspires confidence in the seriousness of such initiatives, which cannot be seen as reliable alternatives to the Belt and Road Initiative and other similar Chinese initiatives. There may be some obstacles facing the BRI in light of the repercussions of the COVID-19 pandemic and the current international situation in relation to what is going on in Europe, but we trust China’s ability to control matters and overcome these obstacles as we have always been entrusted with as a reliable partner in sustainable development.