The U.S. and allies on Sunday laid out plans to invest hundreds of billions of dollars for infrastructure projects in developing countries in an attempt to challenge a similar program by China, as they look to challenge autocracies.
President Biden, meeting with the Group of Seven leaders in Germany, said the U.S. would contribute $200 billion over five years toward the Partnership for Global Infrastructure and Investment, from a $2 billion solar project in Angola to a $600 million submarine telecommunications cable connecting Singapore to France.
The U.S. money is a combination of direct government aid and private investment, officials said. The U.S. will aim to mobilize $600 billion in overall investments with funding from allies by 2027, though many details were unknown.
“This isn’t aid or charity,” Mr. Biden said, standing with G-7 leaders at the Schloss Elmau resort in the Bavarian Alps. “It’s a chance for us to share our positive vision for the future…because when democracies demonstrate what we can do, all that we have to offer, I have no doubt that we will win the competition every time.”
The announcement came on the first day of the G-7 summit in the Bavarian Alps, where the agenda was dominated by Russia’s war against Ukraine and the economic fallout from it for Western countries who have imposed a barrage of sanctions against Moscow. The U.S. and allies said Sunday they would ban Russian gold imports.
Ukrainian President Volodymyr Zelensky is slated to address the gathering on Monday via video.
The leaders aimed to display unity in their confrontation with Russia, but an accumulation of political and economic problems at home has tested the allies’ stamina to withstand rising food and energy prices.
At the same time, the early focus on China, which is expected to carry through the G-7 gathering and the North Atlantic Treaty Organization summit in Spain on Tuesday, has threatened to expose older fault lines between western allies.
Mr. Biden has worked to rally allies in confronting China’s economic practices and on human rights but there are limits to how far some partners want to go.
The G-7 statement on China will be a mix of clearly stating the challenge that Beijing is posing to G-7 nations, including criticism of its economic behavior, with a call for partnership in tackling global issues such as climate change, for which China was a necessary partner, a senior German government official said.
“We are in favor of diversification but against decoupling,” the official said.
The G-7 infrastructure projects will focus on investments in climate resilience, secure information and communications technology, gender equity and modernizing health systems, including vaccine manufacturing facilities.
G-7 leaders first unveiled the program at a summit in England to counter Chinese influence in developing nations—in particular its Belt and Road Initiative.
At the time, Mr. Biden heralded it as “Build Back Better World,” reflecting a sweeping domestic spending package that is now all but dead amid disagreements among Democrats.
The Belt and Road agenda launched in 2013 and has been used to expand China’s reach around the world, leading to concern from the U.S. and others that some recipient countries could become increasingly economically dependent on China.
Ahead of Sunday’s announcement, U.S. officials criticized infrastructure models that sell “debt traps” to low- and middle-income partner countries. Studies have shown the Chinese projects have led to hidden debt, environmental hazards and corruption.
The Chinese Embassy in Washington didn’t immediately respond to a request for comment.