G7 leaders unveil $600bn plan to rival China’s Belt and Road strategy
Leaders at the G7 summit have revealed an ambitious US$600 billion plan to counter China’s Belt and Road strategy.
Several of the world’s wealthiest democracies came together at the summit in Bavaria as they agreed on a plan to increase political and commercial influence through several investments across emerging economies.
The Partnership for Global Infrastructure and Investment (PGII) launched the scheme after initial talks at last year’s G7 talks in the UK.
"I want to be clear. This isn't aid or charity," President Biden said of the G7's PGII scheme.
"It's an investment that will deliver returns for everyone."
The US will raise US$200 billion over five years to fund the launch of infrastructure in middle and low-income countries, while the EU will raise a further US$300 billion.
Some of the projects highlighted include a subsea cable that will connect Singapore to France through Egypt and the Horn of Africa.
Howard Kidorf, managing partner at Pioneer Consulting said: “The role of telecommunications around the world is, in many ways, returning to the purview of nation states.”
“I would not be surprised if a portion PGII was dedicated to the operators of telecom infrastructure.”
“Though privacy and national security are not direct drivers of these multi-national telecom investments, their impact cannot be ignored.”
“I doubt the telecom portion of the Partnership for Global Infrastructure and Investment that will emerge from this funding will match the steady, coordinated investment being made by China.”
China’s investment scheme has become more prevalent in recent years, with the country developing programmes and initiatives in over 100 countries.
The Belt and Road Initiative (BRI) is aimed at creating a modern version of the ancient Silk Road trade route from Asia to Europe and is seen as the flagship of President Xi Jinping’s plan for Chinese expansion.
It is made up of a belt of six overland corridors and direct trade routes to and from China and a road of shipping routes from the South China Sea to the Indian Ocean.
The US, though, has repeatedly insisted that the plan provides little benefit for the many developing countries involved. It has also been criticised for trapping countries into loans they cannot pay back, forcing them to cede key assets after failing to meet debt repayments.
A spokesperson for the Chinese foreign ministry responded, welcoming the initiative.
“We believe that there is no question that various related initiatives will replace each other,” said Zhao Lijian.
“We are opposed to pushing forward geopolitical calculations under the pretext of infrastructure construction or smearing the Belt and Road Initiative.”