Danny Li | January 1, 2019
Responding To: Managing U.S.-China Cooperation and Competition
Infrastructure Cooperation: A New Wind to push China and the United States Together
The Trump presidency has heightened the competition between China and the United States. A notably severe peak has occurred around trade policies, finally resulting in a trade war. Other controversial issues such as human rights and the South China Sea are considered as somewhere between inherently irresolvable and barely manageable. To avoid falling into the trap of confrontation, the two countries urgently require a bonding issue, which could be seen as an enabling space of cooperation that embodies common values between the divergent world views.
During the Obama administration, when awkward issues appeared between China and the United States, cooperation on climate change would usually diffuse the situation down to a tolerable degree of tension. For example, in September 2015, when the two countries were on the edge of a cyber conflict resulting from what was considered to be Chinese cyber-attacks on the United States, the two leaders mitigated the conflict by issuing a joint announcement on climate change in Washington D.C. However, unlike President Obama, who viewed climate policies as drivers for economic growth, Trump views them as constraints. He has stated clearly that climate change will not be a priority for his administration. Therefore, the Trump leadership lacks any type of useful glue to bring U.S. - China relations toward prospects for cooperation. In fact, only massive infrastructure cooperation, truly vital to China, could be the key.
As the world’s two largest economies with the engines that drive half of the entire world’s economic growth, China and the United States have been sharing common interests in facilitating global growth, and especially in infrastructure development. Indeed, both Presidents Xi and Trump have a genuine commitment to infrastructure development. Trump pledged money to upgrade America’s national infrastructure early in his campaign, while the Belt and Road Initiative (BRI), an infrastructure development plan of trillions of dollars is the flagship program of Xi’s foreign policy, aiming to connect China to other countries by developing a web of highways, high-speed railways, ports and energy terminals. Beijing has already set up dedicated institutions such as the Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund to provide financial support to those projects.
The world’s infrastructure deficit is definitely worthy of concern. In the 21st century, one-third of humans are still suffering from a lack of access to basic sanitation and continuous electricity; meanwhile, over one billion people don’t even have a reliable phone service. During the Obama administration, the United States tended to respond China’s infrastructure initiatives unwillingly. On some occasions, for example when it came to the AIIB, the United States even tried soft power tactics to undermine China. However, as a businessman who had given his name to ten landmarks, Trump could still be persuaded to go for grandiose construction projects and so found BRI more appealing.
However, it has to be conceded that despite official claims of openness and transparency, projects under the BRI favor Chinese firms, especially state-owned enterprises, and are less open to local and foreign participation. To improve the engagement of the United States, the BRI should ideally be led by the private sector and clear the misunderstanding of an overarching Chinese strategy of regional hegemony. Meanwhile, China may leave some space for Trump to generate a U.S. version of the BRI or to expand this initiative beyond Asia into other infrastructure-deprived regions like Africa, Latin America and the Caribbean. The BRI with the common consensus of China and the United States would end the trade war in a natural fashion. Just as importantly though, it would also benefit both the world’s poor and the economies of China and the United States.
From a more American perspective, increased prosperity in the emerging market will generate more consumers who demand American goods and services. For example, with more energy terminals constructed around the world, the U.S. energy industry would enjoy more destinations for its oil, gas and coal. Since 80 percent of people in the developing world are unable to access the internet, U.S. web companies can expect millions of new customers if disconnected communities were linked to the world-wide web via a proper infrastructure.
In conclusion, cooperation between the United States and China on infrastructure development could work like strong winds, pushing the two countries to work towards solutions on all their other disagreements. Such commonality of purpose would transform the situation from a zero-sum-game into conducive cooperation. The result would not only be a more developed world where more people can have access to energy, communication, and transportation networks, which facilitate economic activity, prosperity, and growth, but also a U.S.-China relation that’s more resilient when facing inevitable challenges.
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