How Biden plans to checkmate China

Shirvan (0:00)

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Geopolitical battle lines are being drawn. President Joe Biden has launched two new initiatives to rival China's international commercial ambitions. One is a global infrastructure program that looks to build physical and digital infrastructure, connecting dozens of countries spanning Asia, Africa and Europe. The other is a trade bloc in Asia-Pacific that encourages Western businesses to relocate elsewhere in the region away from China. It took Washington more than 10 years to develop these two programs. Up until now, there was no credible alternative to Chinese investments. And though the details have yet to be negotiated, the two initiatives make up the hallmarks of Biden's foreign policy. So what is this about? And can America beat China at its own game?

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With USAA, members can get up to 10% in savings by bundling auto and home insurance in one place. Quit adding up insurance providers. Start adding up savings. Visit usaa.com/bundleautoproperty to see how much bundling could save you. Restrictions apply. Towards four categories, renewable energy, healthcare, gender equity, and digital infrastructure. Biden says that the plan will allow participating nations to see the concrete benefits of partnering with democracies. Either way, the United States has pledged to contribute 200 billion dollars to the initiative, while Germany, France, and Italy will raise 300 billion euros, and the remaining of the total grant will come from the United Kingdom, Canada, and Japan. How much funding will come from the private and public sectors is unknown. Though impressive, America's Partnership for Global Infrastructure Initiative still falls short in funding compared to its rival, the Belt and Road Initiative. Beijing's infrastructure project doesn't have an official price tag, but China has invested about 800 billion euros across the globe, which surpasses the investments promised by the G7. And China isn't done yet. Trillions more dollars are expected to be invested through the Six Arms of the Belt and Road Initiative in the coming decade. What's more, according to official Chinese data, Beijing has signed more than 170 cooperation agreements with 125 countries, and another 29 agreements with international organizations across Asia, Europe, Africa, and South America. Matching the size and scope of China's grand strategy will be tricky, even for the G7 nations. But perhaps the biggest issue with the PGII, the elephant in the room, if you will, is that the United States is bad at infrastructure investing. In fact, America is bad at maintaining its own physical infrastructure, let alone working on infrastructure projects abroad. It is by no means an accident. In 2020, Chinese firms won $2.3 billion worth of contracts outside China, while the United States gathered only $27 million worth of contracts. $2.3 billion versus $27 million is a staggering difference. America has a lot of strengths, but China is just better at building. Nevertheless, Biden's project could give China a run for its money. The PGII could provide some recipient nations with a feasible alternative to China. If implemented, the G7 infrastructure plan would reduce Beijing's influence in some places. For instance, in Angola, $2 billion will be invested in a solar-powered project, while $600 million will be invested to build a submarine telecommunications cable connecting Singapore to France through Egypt and the Horn of Africa. Still more, a multimillion-dollar vaccine manufacturing facility will be built in Senegal. These projects, and many others like it, would be constructed by either American or European companies. Doing so makes the Partnership for Global Infrastructure Initiative less of a charity act and more of an investment to deliver returns for everyone. Yet, as promising as it sounds, in some places where the arms of the Belt and Road Initiative pass, Central Asia, for instance, the geography and economy depend on either Russia or China. Biden's plan will make little to no difference in such places. The second part of Biden's endgame is the trade aspect. One month before signing the PGII in May 2022, Biden had rolled out a new type of economic agreement that included 13 nations in Asia-Pacific, Japan, India, Australia, South Korea, Indonesia, Thailand, Singapore, Malaysia, the Philippines, Vietnam, New Zealand, Fiji, and Brunei. The deal, dubbed the Indo-Pacific Economic Framework for Prosperity, or IPEF for short, is Biden's pivot to Asia to contain Chinese commerce at sea. The IPEF comes five years after Trump abandoned Obama's Trans-Pacific Partnership Agreement. Trade deals are notoriously disliked in the United States, which is why Obama's proposal failed to deliver. Biden, however, is going in another direction, something more flexible and loose. Unlike its previous iteration, the IPEF does not guarantee free trade between its members. Instead, it is an understanding to deepen cooperation between the United States and the Asia-Pacific nations. The details have yet to be negotiated, but taken together with the United States, the Indo-Pacific Economic Framework for Prosperity represents about 60% of the world's population and nearly 40% of the global GDP. Those are some serious numbers. The purpose of the Economic Alliance is to counter China's influence by enhancing political and economic cooperation within the region. The IPEF will focus on four pillars, supply chains, renewable energy, anti-corruption, and maritime trade. The members of the economic bloc will enjoy certain advantages from American companies that are looking to relocate away from China. So, as Western businesses move away from China in the coming decade, the IPEF has the potential to fill the vacuum. India, Vietnam, Thailand, Malaysia, Indonesia, and the Philippines have large workforces that could step up and fill the void. The shortcoming, however, is that without greater access to the US market, the IPEF will lack the game-changing incentive to tip the balance. The terms are still being negotiated, and the talks could last until 2023, but the fundamental question is whether or not Washington will offer lower tariffs or access to the US market. But since trade deals are difficult to close in the United States, the full reach of the IPEF is yet to be determined. Biden and his Asia-Pacific counterparts know this and see the Indo-Pacific Economic Framework for Prosperity as a stopgap policy that holds on to the belief that American domestic politics will come around and pivot to Asia. A sincere pivot this time. By any means, the greatest misconception in geopolitics is seeing the global order as a stable, immutable structure. America is still number one in criteria such as military, economy, and diplomacy. But the new kids on the block are increasingly challenging that role. China's Belt and Road Initiative has had a 10-year head start, and while the PGII and the IPEF are presented as America's triumphant countermove, it ultimately boils down to execution. A bad plan that is well executed will yield better results than a good plan that is poorly executed. I've been your host Shirvan from CaspianReport. Help us beat the algorithm by commenting, liking, and sharing this video. Thank you for watching and so long!