Towards a joint Western alternative to the Belt and Road Initiative?

Briefing 01-12-2021

Since the People's Republic of China (PRC) launched its Belt and Road Initiative (BRI) in 2013, President Xi Jinping's signature foreign policy project has drawn widespread criticism, including for challenging the traditional model of multilateral infrastructure financing. Western-led bilateral and plurilateral infrastructure and connectivity initiatives designed as alternatives have remained fragmented and have been dwarfed in scope and scale by a geographically and thematically rapidly expanding BRI, which has thrived on an attractive brand and a streamlined authoritarian one-stop-shop project management system. In contrast to Japan, it has taken the EU and the US years to respond with separate regional strategies reflecting their distinct geopolitical outlook and economic relations with the PRC. The manifold implications of the PRC's use of physical and digital infrastructure projects as a foreign policy tool to expand its sphere of influence both across the world and within international organisations have been widely under-estimated. At their 2021 G7 Summit, however, leaders from Canada, France, Germany, Italy, Japan, the UK and the US agreed on a global 'values-driven, high-standard and transparent infrastructure partnership', known as the 'Build Back Better World' (B3W) initiative, which echoes US President Joe Biden's 2020 'Build Back Better' campaign trail slogan. It is the first collective attempt of major democracies to craft a sustainable and targeted alternative to the BRI and to address the challenges it poses to the rules-based international order. It seeks to help fill, by 2035, an infrastructure gap in low and medium-income countries estimated at US$40+ trillion, by leveraging public development finance to mobilise untapped private-sector funds. Trends in the flows of global private infrastructure investment suggest that the initiative will face opportunities and challenges. The European Parliament's 2021 resolution on connectivity and EU-Asia relations calls for an EU global connectivity strategy as an extension of the 2018 Europe-Asia connectivity strategy, in order to strengthen the EU's role as a geopolitical and geo-economic actor with a single narrative, and to broaden partnerships with democracies across the world that share the EU's fundamental values.