Is America truly in the midst of a foreign policy re-awakening? Readers may have heard about the Blue Dot Network, an initiative that is meant to counter China’s Belt and Road. It was announced during the previous administration, in November 2019, by America, Japan, and Australia at the Indo-Pacific Forum in Thailand. Then, the plan was to certify infrastructure projects around the world that meet high standards of transparency, sustainability, and developmental impact.
The aim was to primarily give private investors who manage long-term assets, including US pension funds and insurance companies, the confidence to participate and help address the massive global need for infrastructure estimated to be worth almost 100 trillion dollars over the coming two decades. The three governments have so far publicly been at pain to declare that the Network is a response to the Belt and Road, but the recent push to expand it is screaming outright strategic competition.
Essentially, the Biden administration is doubling down on Trump’s initial effort. An inaugural consultative meeting was held in Paris this week, bringing together a respectable audience comprising major Western governments, leading academics, and as many as 150 global executives representing 12 trillion dollars in combined portfolios. The Commerce Department is set to invoke an investigation into America’s reliance on Chinese rare earth imports, and a supply chain trade strike force was launched.
No more kidding around in Washington, it seems. In addition, Biden has gone as far as to contemplate an unprecedented trade and investment framework with Taiwan, a materially sensitive issue for Beijing. It is clearly a move to take further control of the semiconductor manufacturing hub and to safeguard the supply chain emanating from the island to American companies, but in light of the perceived aggression of the move on China’s end, it is so far no more than contemplation.
The key for an expansion of the Network is to enlist support from other Indo-Pacific partners, predominantly India and South Korea. Talk has been of establishing a new G10, as in the existing G7 plus Australia, India, and Korea. The involvement of Taiwan and still hesitant Korea is particularly crucial with regards to the semiconductor industry and supply chain. It almost appears that Washington is looking to change the narrative from the Quad to Blue Dot in order to finally loop Seoul into its alliance against China.
However, call it what you will, whether it is Quad, Asian NATO, Blue Dot Network, G10, or any other acronym or synonym that stands for China containment. Washington will never spend the kind of money that Beijing says it intends to through the Belt and Road. One needs to wonder whether Biden’s strategy of setting a framework of standards, including the usual buzzwords of transparency, sustainability, rule of law, and good governance, will do the trick to lure so-called allies into making an enemy of Beijing.
Public-private partnerships, propagated as a key ingredient of the Blue Dots, may be a great idea to raise sufficient capital for soft and hard infrastructure projects in strategic emerging markets. But who is to say that Beijing is purely state-driven and -sponsored in this endeavour? The AIIB has been designed to do just that, bring private money to the table. The West may not like it, as it fears for a lack of influence over the Bank’s decision-making, but that’s a different story.
Promoting infrastructure around the world definitely serves America’s commercial and strategic interests. There shouldn’t be a shred of doubt. But if you compare the two giants leading their respective offerings, who would you give more credibility and trust on execution? China, who has built state-of-the-art infrastructure around rail, highways, ports, and broadband and has become the most digitalised economy on earth? Or America, whose bridges, airports, and pretty much everything else has been crumbling?
Re-awakening maybe, but it won’t be sufficient to be awake and stir the pot. You must deliver the goods for people to listen to you.