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G7 aims to raise $600 billion to counter China's Belt and Road

Commodities Jun 27, 2022 04:46AM ET
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© Reuters. U.S. President Joe Biden attends a working lunch with other G7 leaders to discuss shaping the global economy at the Yoga Pavilion, Schloss Elmau in Kuren, Germany, June 26, 2022. Kenny Holston/Pool via REUTERS

By Andrea Shalal

SCHLOSS ELMAU, Germany (Reuters) -Group of Seven leaders pledged on Sunday to raise $600 billion in private and public funds over five years to finance needed infrastructure in developing countries and counter China's older, multitrillion-dollar Belt and Road project.

U.S. President Joe Biden and other G7 leaders relaunched the newly renamed "Partnership for Global Infrastructure and Investment," at their annual gathering being held this year at Schloss Elmau in southern Germany.

Biden said the United States would mobilize $200 billion in grants, federal funds and private investment over five years to support projects in low- and middle-income countries that help tackle climate change as well as improve global health, gender equity and digital infrastructure.

"I want to be clear. This isn't aid or charity. It's an investment that will deliver returns for everyone," Biden said, adding that it would allow countries to "see the concrete benefits of partnering with democracies."

Biden said hundreds of billions of additional dollars could come from multilateral development banks, development finance institutions, sovereign wealth funds and others.

Europe will mobilize 300 billion euros ($317.28 billion) for the initiative over the same period to build up a sustainable alternative to China's Belt and Road Initiative scheme, which Chinese President Xi Jinping launched in 2013, European Commission President Ursula von der Leyen told the gathering.

The leaders of Italy, Canada and Japan also spoke about their plans, some of which have already been announced separately. French President Emmanuel Macron and British Prime Minister Boris Johnson were not present, but their countries are also participating.

China's investment scheme involves development and programs in over 100 countries aimed at creating a modern version of the ancient Silk Road trade route from Asia to Europe.

White House officials said the plan has provided little tangible benefit for many developing countries.

Chinese foreign ministry spokesman Zhao Lijian defended the track record of BRI when asked for comment at a daily briefing in Beijing on Monday.

“China continues to welcome all initiatives to promote global infrastructure development," Zhao said of the G7's $600 billion plan.

"We believe that there is no question that various related initiatives will replace each other. We are opposed to pushing forward geopolitical calculations under the pretext of infrastructure construction or smearing the Belt and Road Initiative.”

Biden highlighted several flagship projects, including a $2 billion solar development project in Angola with support from the Commerce Department, the U.S. Export-Import Bank, U.S. firm AfricaGlobal Schaffer, and U.S. project developer Sun Africa.

Together with G7 members and the EU, Washington will also provide $3.3 million in technical assistance to Institut Pasteur de Dakar in Senegal as it develops an industrial-scale flexible multi-vaccine manufacturing facility in that country that can eventually produce COVID-19 and other vaccines, a project that also involves the EU.

The U.S. Agency for International Development (USAID) will also commit up to $50 million over five years to the World Bank’s global Childcare Incentive Fund.

Friederike Roder, vice president of the non-profit group Global Citizen, said the pledges of investment could be "a good start" toward greater engagement by G7 countries in developing nations and could underpin stronger global growth for all.

G7 countries on average provide only 0.32% of their gross national income, less than half of the 0.7% promised, in development assistance, she said.

"But without developing countries, there will be no sustainable recovery of the world economy," she said.

($1 = 0.9455 euros)

G7 aims to raise $600 billion to counter China's Belt and Road
 

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Comments (17)
Nils Hullmann
Nils Hullmann Jun 27, 2022 6:43AM ET
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imagine coming to a party where someone is networking for 15 years...eu is dieing and the eu population will pay an insane price as this slowly happens
RJ BSNT
RJ BSNT Jun 27, 2022 5:28AM ET
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Every action from western countries is to counter china ..how unfortunate? They could have complemented china but they r so scared that they r constantly competing china which shows china seems to be in path to become global power
SureWin Sam
SureWin Sam Jun 26, 2022 8:12PM ET
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7 vs 1. They are telling me nothing but said: we are weak and getting weaker like an old man, nobody in this world can head to head with China anymore, not even US king.
Ramzi Dalbah
Ramzi Dalbah Jun 26, 2022 8:10PM ET
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BRICS Will show these losers Europeans that its TIME FOR CHANGE
John Laurens
John Laurens Jun 26, 2022 7:48PM ET
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Let China into the WTO and then act shocked when this happens.. Leaders of the G7 really are “special”.
John Laurens
John Laurens Jun 26, 2022 7:47PM ET
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They let China into the WTO and then act shocked when they steal all your s**t, run massive trade surpluses, then start buying influence with little weak countries.. The leaders of the G7 really are a special kind of stoo - pid aren’t they?
ottin nerner
ottin nerner Jun 26, 2022 7:42PM ET
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600B is small money compares to what we print last year 6 effin trillion.... and expect more inflation....
ottin nerner
ottin nerner Jun 26, 2022 7:39PM ET
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while china investing in infrastructure in developing countries, the west are investing in NGOs to distabilise countries....
Ram Charan
Ram Charan Jun 26, 2022 7:32PM ET
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Wow.... 600 $ Billion... Indian needs more technology and market access...
Tomek Mi
Tomek Mi Jun 26, 2022 5:12PM ET
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itp better to Wake up later than mever:)
 
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