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G7 Plans for New Global Infrastructure Initiative to Challenge China’s Belt and Road Initiative

China has tried to project itself as a helping hand for developing countries in matters of infrastructure and economic development. However the reality is otherwise. Wherever Beijing has invested under the aegis of Belt and Road Initiative (BRI), China has made sure that the firms holding the contract are Chinese, which also implies having Chinese labour force. This way of functioning doesn’t add anything to the recipient countries’ employment capacity and neither in terms of getting their companies any kind of monetary benefits for which the BRI advocates the most. BRI projects are highly exploitative not just in economic terms but also in terms of natural resources. Overall, the Chinese projects may be low-cost, but they are characterised by low standards, hurried timelines and involve high environmental costs ...

03.10.2022 20:30
Piše: Valerio Fabbri
Ključne besede:   China   BRI   Belt and Road Initiative   environment   damage   G7   Srilanka   Pakistan   USA   Germany   UK   France   Italy   EU   Japan   Peru   Beijing

Overall, the Chinese projects may be low-cost, but they are characterised by low standards, hurried timelines and involve high environmental costs.

G7, The Group of Seven met in Germany at the end of last June. The most significant outcome of this meeting has been the plan for an ambitious programme – the Partnership for Global Infrastructure and Investment (PGII), [1] a programme that was launched with the view to challenge China’s Belt and Road Initiative (BRI). Recently, many news reports have highlighted instances of disillusionment vis-à-vis BRI and many of the recipient states of Chinese investments have rued China’s debt trap diplomacy as an outcome of the BRI. The countries which have fallen prey to this are usually low- and middle-income countries like Sri Lanka and Pakistan[2]

 

Beijing has not only encircled the countries under its debt trap by outwitting them diplomatically, but it has also interfered in their domestic affairs. The domestic interference of China in Sri Lanka, for example, can be understood by looking at the 2015 Sri Lankan elections, when large funds flowed in for the campaign from China. By the same token, in the case of Hambantota Port the Chinese were able to negotiate the defence aspects with the Sri Lankan government, ensuring that its military was able to get access to the port. [3]

 

In Pakistan’s case, to ensure the security of the flagship China Pakistan Economic Corridor (CPEC), the Chinese government bypassed Islamabad to reach out to the Baloch separatists. Yet, Beijing has been less than enthusiastic when it comes to ensuring Pakistan’s economic stability. [4] Taking Beijing’s help for infrastructure development has proved to be an erroneous choice for both Colombo and Islamabad, making both countries deeply entrapped under the burden of Chinese debt.

 

 

"A study published earlier this month in the Current Biology journal found that the BRI could potentially introduce more than 800 alien invasive species – including 98 amphibians, 177 reptiles, 391 birds and 150 mammals – into several countries along its many routes and developments, threatening their ecosystems."

(BUSINESS & HUMAN RIGHTS RESOURCE CENTRE, Dec. 2019)

 

 

However, the situation is worse in the case of Sri Lanka. Due to its worsening economic condition, the country has failed to import even essential commodities like food and fuel. All the reserves are over and done with and this resulted in the collapse of the government, when the popular resentment forced the President and the Prime Minister to resign and even forced the President to flee the country. [5]

 

Although China has tried to project itself as a helping hand for these countries in matters of infrastructure and economic development, the reality is otherwise. Wherever Beijing has invested under the aegis of BRI, China has made sure that the firms holding the contract are Chinese, which also implies having Chinese labour force. This way of functioning doesn’t add anything to the recipient countries’ employment capacity and neither in terms of getting their companies any kind of monetary benefits for which the BRI advocates the most. BRI projects are highly exploitative not just in economic terms but also in terms of natural resources. For instance, the Chancay Multipurpose Port Terminal in Peru, one of the BRI projects, is alleged to have been detrimental to the flora and fauna in the surrounding area due to the huge amount of toxic emissions. This has also adversely affected the local community, which had to shift its livelihoods due to the pollution.

 

 

Overall, the Chinese projects may be low-cost, but they are characterised by low standards, hurried timelines and involve high environmental costs.

 

 

Considering these geopolitical developments, the G7 – which includes the United States, Canada, Italy, the UK, France, Germany, and Japan along with the European Union (EU) – have introduced the Partnership for Global Infrastructure and Investment (PGII), an alternative mechanism for the developing world which can replace, or at least lessen, the adverse impact of China’s BRI. The central purpose of the PGII initiative is to provide funding to the countries in need for critical infrastructure, including roads, bridges, ports as well as communication facilities. Apart from these goals, the PGII aims to tackle climate change, betterment of global health, helping to build digital infrastructure and not to forget achieving gender equality. [8]

 

As the US National Security Adviser Jake Sullivan mentioned, "(We) do think that there is increasing convergence, both at the G7 and at NATO, around the challenge China poses and around the need – the urgent need for consultation and especially alignment among the world’s leading market democracies to deal with some of those challenges". [9]

 

The PGII is seen as one of the crucial mechanisms with which the Biden administration is intending to tackle the China challenge. For this, the G7 countries have pledged of $600 Bn. The investments include a solar project in Angola, a submarine telecommunications cable which that will connect Singapore to France, and a multi-vaccine manufacturing facility in Senegal. [10]

 

It is no wonder that China has criticised the PGII as "ill-intended" and "infeasible". According to the China Daily, Beijing believes that the PGII is launched with an intention to compete against China. [11] Beijing is sceptical regarding the outcomes of the PGII and affirms that it is better for other countries including the G7 to join China’s BRI. PGII is an indication that Chinese investments, after a flurry of deals in the last few years world over, are now receiving a pushback from many countries. Experience of South Asian economies like Sri Lanka, Pakistan, and Nepal has shown that these investments may appear attractive in the short term, but in the long term they cause nuisance.

 

The world is taking notice of ill effects of Chinese investments, much like Beijing has been forced to take note.

 

________________

[1] https://www.g7germany.de/

 

[2] https://www.bbc.com

 

[3] https://www.nytimes.com

 

[4] https://www.business-standard.com

 

[5] https://www.washingtonpost.com

 

[6] The G7 must avoid repeating China’s mistakes in its new infrastructure initiative for the Global South – Economy and ecology | IPS Journal (ips-journal.eu)

 

[7] https://dialogo-americas.com

 

[8] G7: Leaders pledge $600 billion to fund new infrastructure | World Economic Forum (weforum.org)

 

[9] https://www.whitehouse.gov/

 

[10] G7 summit: Leaders detail $600bn plan to rival China's Belt and Road initiative - BBC News

 

[11] https://www.chinadaily.com.cn

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