Have a story idea
Have a story idea? Send it to us here.
Source : PxHere
May 22, 2023
Author : Alex Bustillos and Patty Allen
The US and China have been at loggerheads for years now, and both Washington and Beijing are engaging in a game of one-upmanship that is impacting global politics and internal policies as well.
The Belt and Road Initiative (BRI), unveiled by Chinese President Xi Jinping in 2013, is a pivotal program to expand its diplomatic and economic presence. The BRI has funded bridges, ports, power plants, trains, tunnels, and 5G networks across the Global South to $50 billion to $100 billion every year.
The BRI presently encompasses 139 nations, accounting for 63 percent of the world's population and 40 percent of global GDP. The BRI-supported significant projects that have been completed span from a railway in Kenya to a port in Pakistan.
Meanwhile, in the recently concluded G7 Summit, President Biden announced the Partnership for Global Infrastructure and Investment (PGII) to compete with China's global infrastructure initiatives.
President Biden stated, “I’m proud to announce the United States will mobilize $200 billion in public and private capital over the next five years.”
The G7 governments and investors hope to put in $600 billion in low- and middle-income nations over the next five years through the PGII, with the US contributing $200 billion.
Some argue that the PGII is simply a rebranding of the Build Back Better World (B3W) effort, announced at the G7 Summit last year. As per the PGII, officials say the funding will be a 1-to-10 public-private funding ratio, but in reality, it could become a 1-to-1 ratio.
Inside the US, consumer expectation is rapidly changing, and it's becoming difficult for existing infrastructure to keep pace. This is one reason President Biden signed the bipartisan Infrastructure Investment and Jobs Act into law in 2021, and the funds are being distributed across several verticals, including high-speed internet and public transportation. Yet, is it enough?
China has funneled $2.3 trillion into scaling its infrastructure in 2022. China intended to invest that sum in the course of a year alone. In comparison, the United States $1.2 trillion infrastructure investment is supposed to be distributed over five years.
This investment discrepancy is troubling. While some manufacturers are planning to move away from China due to recent reshoring trends, the United States has been upfront about its desire to welcome these companies. However, to do that successfully, the United States must be equipped with the funds and infrastructure required to support an influx of manufacturing operations.
Improvements must be made across several US transportation networks, including air, ocean, and rail. However, roads and bridges are arguably the country’s most pressing concern. Roads are not only the most used transportation method across the United States but also the most outdated.
It can be difficult to move across many of the nation’s highways without encountering traffic jams caused by overcrowding and poor road surface conditions.
Despite these problems, only a significantly small portion of the $1.2 trillion earmarked for infrastructure improvements has been allocated to improving the nation’s roads and bridges.
According to the American Road & Transportation Builders Association, across all 50 American states, at least one in three bridges requires repair. Therefore, addressing these pressing concerns should be a priority for the White House.
CEO Bill Dunavant of Dunavant Enterprise said, “As an American, I want our country to always be ahead of the competition. We can’t build roads and only think 10 years out. We have to be thinking at least 25-50 years ahead.”
While the U.S. has spent billions of dollars on wars and proxy wars in Afghanistan, Iraq, Libya, Syria, and Ukraine, China has meticulously built up its transportation infrastructure. Instead of sabre rattling over Taiwan, American and Chinese officials should be focused on dialogue and healthy competition. Any future war would be catastrophic for all involved.
Category : Federal Government International Market Watch