PLYMOUTH, ENGLAND – U.S. President Joe Biden’s administration said it will announce an infrastructure financing mechanism for low- and middle-income countries, designed to rival China’s Belt and Road Initiative.
The initiative, called “Build Back Better for the World,” will be launched Saturday with partners at the G-7 Summit in Cornwall, England. It will be “values driven, transparent and sustainable,” according to a senior administration official.
“We believe we will beat the BRI by offering a higher-quality choice and we’ll offer that choice with self-confidence about our model that reflects our shared values,” a second senior administration official said.
The official said the “B3W” initiative, as it is called by its acronym, aims to mobilize the private sector to invest and fulfill tens of trillions of dollars of infrastructure financing needs in the developing world, while meeting labor, environmental and transparency standards.
The timeline, structure and scope of the financing vehicle, as well as the size of actual funding to be committed by the U.S., is still unclear.
The administration official said the hope is that with G-7 partners, the private sector and other stakeholders, the U.S. will catalyze “hundreds of billions of dollars” in infrastructure investment for low- and middle-income countries “soon.”
“It’s fair to ask whether this is going to be actually new funding, new capacity to build infrastructure in the region, or is this a repurposing and repackaging of resources that are also available,” said Robert Daly, director of the Wilson Center’s Kissinger Institute on China and the United States.
To expand its sphere of influence, Beijing is known to give BRI loans to countries for projects that are not considered creditworthy by established international lenders.
“That raises the question of whether this new program is going to be less risk averse,” Daly said, noting that if these projects were bankable, lenders such as the International Monetary Fund and the World Bank would fund them already.
Sino-U.S. tensions are set to be raised further as Biden lobbies G-7 partners to come out with a strong statement and concrete actions against what his administration calls Chinese use of forced labor, including of Uyghurs from Xinjiang.
Humanitarian organizations say that Beijing has facilitated the mass transfer of Uyghur and other Chinese minorities from Xinjiang and forced them to work under harsh conditions in factories across the country. Those factories are in the supply chains of many global brands, they add.
“We believe these practices are an affront to human dignity and an egregious example of China’s unfair, economic competition,” the administration official said. He said Biden’s statement will send a “wakeup call” that the G-7 is serious about defending human rights and will work together to eradicate forced labor from consumer products.
In February, several members of the U.S. House of Representatives reintroduced the Uyghur Forced Labor Prevention Act, legislation that would, among other things, require financial disclosures from U.S. publicly traded businesses about their engagement with Chinese companies and other entities engaged in serious human rights abuses in the Xinjiang region.
It is unclear how much support for these initiatives Biden would receive from G-7 partners, some of whom have deeper economic ties with Beijing.