Wealthy countries in the Group of Seven have agreed to establish an infrastructure plan that will compete with China’s Belt and Road Initiative – but that will not stop Beijing’s mass program, a global economic governance expert said on Monday.
The leaders of the G-7 countries met at a three-day summit in the south-west of England which ended on Sunday – their first face-to-face meeting in two years. The group’s infrastructure plan is part of a broad collective rejection against China on issues ranging from human rights violations to non-market practices that undermine fair competition.
“This is not really the goal of stopping the belt and the road. But I think the G-7 signals that they want to offer an alternative that really revolves around the two big things these countries offer,” said Matthew Goodman, senior vice president of economics at the think tank headquarters. in Washington, DC for Strategic and International Studies.
The Belt and Road Initiative is an ambitious Chinese program to build physical and digital infrastructure to connect hundreds of countries from Asia to the Middle East, Africa and Europe. Critics say the signing of Chinese President Xi Jinping’s foreign policy is an extension of his country’s global influence.
Goodman, who is also Simon’s chairman of the political economy at CSIS, told CNBC. “Squawk Box Asia“that the G-7 could make a“ significant contribution ”in reducing the global infrastructure gap by channeling investment into developing countries.
In addition, seven rich democracies would bring better measures to protect infrastructure projects – including transparency, accountability as well as environmental and social standards, Goodman said.
“I think that’s what they’re trying to signal here. Whether I can do it or not, it’s a different story, it’s a very difficult job,” he added.
The U.S. and many countries have criticized the Belt and Road plan, accusing Beijing of leaving participating countries burdened with unsustainable debt while benefiting Chinese companies – many of them state-owned. Next to environmental damage of the program, critics also questioned the transparency of the deal.
China is prominent in a statement issued by the G-7 on Sunday. The G-7 countries are Canada, France, Germany, Italy, Japan, the United Kingdom and the United States
In addition to calling out alleged Chinese violations of human rights and non-market policies, the G-7 also called for greater transparency about the origins of the Covid-19 pavidemia. They stressed the importance of peace and stability across the Taiwan Strait and expressed concern over tensions in the East and South China Seas, where China overlaps with territorial claims with its regional neighbors.
Beijing responded angrily to Monday’s statement.
The Chinese embassy in Great Britain stated that it strongly opposes the statement of the G-7 and that it is strongly dissatisfied. In statement in Mandarin in a CNBC translation, the embassy called on the U.S. and other G-7 members to stop slandering China and interfering in China’s internal affairs.
Prior to the Chinese embassy’s statement, Goodman said Beijing should not be surprised by the G-7’s rejection. He said the group wanted to show that democratic nations work together to address global challenges, unlike authoritarian rivals like China and Russia.
“I think the tone was pretty clear about the concerns these seven big, advanced market economies have about China, its economic coercion, its non-market policies, its human rights violations,” Goodman said.
“And I think it’s well telegraphed ahead of the summit, so Beijing shouldn’t be surprised.”