Countering China: US Responses to the Belt and Road Initiative 9781685859442

Table of contents :
Contents
Acknowledgments
1 US-China Relations
2 Souring on China
3 US Perceptions of the Belt and Road Initiative
4 The BUILD Act and Prosper Africa
5 Vetting Infrastructure Projects
6 Reconfiguring the Indo-Pacific
7 Nudging Europe
8 Build Back Better at Home and Abroad
9 The BRI and the Limits of US Power
Acronyms
References
Index
About the Book

Citation preview

Countering

CHINA

Countering

CHINA US Responses to the Belt and Road Initiative Edward Ashbee

Published in the United States of America in 2023 by Lynne Rienner Publishers, Inc. 1800 30th Street, Suite 314, Boulder, Colorado 80301 www.rienner.com and in the United Kingdom by Lynne Rienner Publishers, Inc. Gray’s Inn House, 127 Clerkenwell Road, London EC1 5DB www.eurospanbookstore.com/rienner © 2023 by Lynne Rienner Publishers, Inc. All rights reserved Library of Congress Cataloging-in-Publication Data Names: Ashbee, Edward, author. Title: Countering China : US responses to the Belt and Road Initiative / Edward Ashbee. Description: Boulder, Colorado : Lynne Rienner Publishers, Inc., 2023. | Includes bibliographical references and index. | Summary: “Explores how the US has responded to China’s Belt and Road Initiative (BRI) from its inception in 2013 through early 2022”— Provided by publisher. Identifiers: LCCN 2022044574 (print) | LCCN 2022044575 (ebook) | ISBN 9781955055918 (hardcover) | ISBN 9781685859442 (ebook) Subjects: LCSH: United States—Foreign relations—China. | China—Foreign relations—United States. | United States—Foreign economic relations—China. | China—Foreign economic relations—United States. | Yi dai yi lu (Initiative : China) | Geopolitics—Asia. Classification: LCC E183.8.C5 A746 2023 (print) | LCC E183.8.C5 (ebook) | DDC 327.73051—dc23/eng/20221028 LC record available at https://lccn.loc.gov/2022044574 LC ebook record available at https://lccn.loc.gov/2022044575 British Cataloguing in Publication Data A Cataloguing in Publication record for this book is available from the British Library. Printed and bound in the United States of America The paper used in this publication meets the requirements of the American National Standard for Permanence of Paper for Printed Library Materials Z39.48-1992. 5 4 3 2 1

Contents

Acknowledgments

vii

1

US-China Relations

1

2

Souring on China

13

3

US Perceptions of the Belt and Road Initiative

41

4

The BUILD Act and Prosper Africa

65

5

Vetting Infrastructure Projects

77

6

Reconfiguring the Indo-Pacific

87

7

Nudging Europe

103

8

Build Back Better at Home and Abroad

127

9

The BRI and the Limits of US Power

137

Acronyms References Index About the Book

151 155 181 187

v

Acknowledgments

I am grateful to colleagues in the Department of International Economics, Government, and Business at Copenhagen Business School for the many constructive and useful discussions that have taken place, whether around the coffee machine or in more formal settings, about the current state of US-China relations. I also very much appreciate comments and feedback from members of the International Studies Association at various conferences. Furthermore, my thanks extend to Thomas Heitmann and Adrian Rudolf Doppler for their tremendous efforts in helping with the preparation of the manuscript. Marie-Claire Antoine at Lynne Rienner Publishers went far beyond the call of duty as an editor and provided invaluable help, as did two anonymous reviewers. Diane Foose proved to be an accomplished and conscientious copyeditor. The generous help of others saved me from many potential pitfalls. Nonetheless, responsibility for the remaining errors and weaknesses is, of course, mine alone.

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1 US-China Relations

Much has been said about the relationship between the United States and China, particularly after Deng Xiaoping committed the country to reform and opening-up at the end of 1978. Rightly so. It is, after all, the world’s most important bilateral relationship. As countless headlines and news reports demonstrate, increasingly combative questions about the character and value of that relationship in the United States and beyond have been raised at regular intervals over several decades, with new ones emerging during President Donald Trump’s term of office. These include: Is China now “overtaking” the United States as the world’s principal superpower? Are imports from China undermining US manufacturing, thereby hitting those on the lowest rungs of the economic ladder? Is it legitimate to talk of a “China shock” as the impact of dramatically increased trade has taken a toll? Should the extension of permanent normal trade relations (PNTR) to China in 2000, just as President Bill Clinton was nearing the end of his second term, now be regarded as a grievous mistake? Further concerns focus on whether US policymakers and bodies such as the World Trade Organization (WTO) have surrendered to Chinese demands and whether US supply chains have become overdependent on the whims of Chinese producers. Chinese firms seem to enjoy an unfair advantage because of the mercantilist strategies pursued by the Chinese state apparatus, so should US firms do more to address labor conditions among their suppliers in China? In addition, large-scale Treasury bond holdings by China, and fears that they could be dumped on the markets, have at times seemed to be a financial gun held to America’s head. Technology is another area of concern. China has been accused of appropriating US technology through straightforward espionage or forced transfer 1

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requirements included in the contracts governing foreign companies operating in the Chinese market. Is China now encroaching on the US lead in strategically sensitive sectors such as artificial intelligence? There are also political and strategic worries that China is a “revisionist” power seeking to overturn the established global order either because of its growing strength or the strength of its ideological commitments, and that the Chinese government’s actions in Hong Kong and Xinjiang signify a new authoritarianism. Finally, there is the Taiwan question. Will US “strategic ambiguity” regarding the defense of Taiwan fail to deter an attack or invasion and, under such circumstances, would the United States and China be heading toward some form of military conflict? In many instances, those who asked these questions had ready answers, which always painted a profoundly critical picture of contemporary China. This is because, after years of equivocation, policymakers, the think tanks constituting the foreign policy “establishment,” and the wider American public have become increasingly hostile toward Beijing. Within government, this hostility became pronounced during the latter half of 2017, following months of uncertainty about the character of the relationship. The multifaceted approach toward China pursued by the Barack Obama administration was replaced by the Trump White House, which established a trajectory declaring that the United States and China were engaged in “strategic competition.”1 While this changed mood acquired more of a diplomatic veneer following President Joe Biden’s inauguration, it nonetheless continued. When senior US and Chinese officials met formally for the first time in March 2021 in Anchorage, commentators were struck by the continuity between the Trump and Biden policy approaches (Jakes and Myers 2021). Whatever breaks and repudiations there had been in other policy arenas, China was still regarded as a strategic and economic competitor in the IndoPacific and across other regions. Few expected any significant improvement in bilateral relations.

The United States and the Belt and Road Initiative US policy responses to the Belt and Road Initiative (BRI), this book’s subject of study, should be seen within the overall context of this bilateral relationship and all its different dimensions. Such responses are inevitably intertwined with the broader questions noted above and reflect the changing character of US-China relations. Initial US reactions to the BRI were hesitant and cautious. The Obama White House was mindful that its objections to the Chinese-led Asian Infrastructure Investment Bank (AIIB) in 2015 had left it relatively isolated as

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European countries raced against each other to become founder members. It therefore acquiesced as the BRI took shape and, at times, even offered muted support for it. In contrast, the Trump administration was unequivocal in its opposition to Beijing’s commitment to global infrastructural development.2 The National Security Strategy published by the White House in December 2017 represented the BRI as part of a project to reshape the global order and declared that China’s “infrastructure investments and trade strategies reinforce its geopolitical aspirations” (Ashbee 2020: 376). This book considers the ways in which the US critique of the BRI was, or was not, translated into policy and implemented.

The BRI: Win-Win Cooperation The BRI was first established in 2013 as One Belt One Road (OBOR) and, although framed in terms of “win-win cooperation,” it also seemed to capture the economic, political, and strategic élan of a resurgent China.3 Furthermore, it quickly became the defining endeavor of Xi Jinping’s presidency and a deliberate evocation of China’s Han Dynasty, which had forged trade routes across Central Asia to Europe. The “Belt” originally consisted of six economic corridors stretching from China across Eurasia. The “Road” sought to invest in and develop shipping routes through the South China Sea, the South Pacific Ocean, and the wider Indian Ocean area. These initiatives were tied, at least in public statements of intent, to policy coordination, connectivity, unimpeded trade, financial integration, and the development of people-to-people bonds. Although the Chinese government has shied away from direct comparisons, the BRI dwarfed the Marshall Plan that provided US assistance to Western Europe in the aftermath of World War II.4 Moreover, in many countries, the BRI gained political and economic policy capital from the Chinese development model. It seemed to promise rates of growth that contrasted sharply with the tepidity of the economies of North America and Europe, which remained caught between the hardships caused by the prolonged aftermath of the 2008 financial crisis and commitments to government debt reduction. In particular, the BRI seemed to highlight the structural weaknesses of the United States and its growing inability to provide global, or even regional, public goods. Alongside this, it also provided a basis for urbanization modeled on the development of Shenzhen, as well as the development of economic corridors and “connectivity.” The “port-park-city” development around Djibouti and the construction of Borten on the Laos-China border have been hailed as examples of this (Chen 2020: 50–54).

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Nonetheless, while hailed and projected in grandiose terms and depicted by hostile commentators as a singular, unified expansionary drive directed by the Chinese Communist Party, the BRI was, from its inception, open to criticism. Its overall purpose and boundaries were always uncertain and imprecise. Indeed, there is no official definition of what constitutes— or what does not constitute—a BRI project (A. Gupta 2018: 60). Although an extreme example, it has been noted that even a tire factory constructed in Serbia has been labeled a BRI project (Medcalf 2020: 103). Commentators have suggested, on the basis of comparable cases, that it is in large part a branding exercise that has reframed commercial projects that were already planned or under way. Furthermore, the BRI’s governance structures are hard to identify, although there was an arbitration commission and courts were created to adjudicate in disputes (Silk Road Briefing 2018). There is, however, as a report commissioned by the Council on Foreign Relations has noted, no central governing institution (Lew et al. 2021: vii). Instead, the BRI is structured around multiple, and often competing, actors including China’s policy banks, state-owned enterprises, the National Development and Reform Commission, the Ministry of Commerce, and the Ministry of Foreign Affairs. The relationship between public and private participants is always uncertain. Furthermore, BRI governance processes do not take place within China alone. Although driven by Chinese political and economic logics, there are transnational networks of actors structured around interactions with elites across the different continents: “The BRI is adaptive and responsive to demand pulls: it expanded into Latin America not primarily at the behest of Chinese officials but rather because of lobbying by Latin American political elites” (Lew et al. 2021: 13).

Infrastructure Development The building of infrastructure can lay a basis for the development of industrial concentrations in particular regions (Pierson 2000). Apart from its inherent values, it also offers potential spillovers and complementarities. Even more importantly, infrastructure has at times been at the core of statebuilding processes and political development. In the United States, for example, while there had been earlier efforts at infrastructural development through the construction of canals and roads during the nineteenth century, railroad development acted as a spur to the emergence of townships and cities, and increasingly unified the domestic market as well the growth of allied industries and sectors. Furthermore, given the size and scale of the railroad network and the negative externalities created by interstate competition, its construction compelled the individual states to turn to the federal

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government in Washington. Even though the process of centralization was held back by the separation of powers between the branches of government and the obstacles to coalition building within Congress, railroad development reconfigured the relationship between state and federal government. Over time, it “funneled more and more economic and political might to Washington, DC” (Callen 2016: 14). Similarly, although the construction of the Berlin to Baghdad railway was completed only in the 1930s, it was initially seen as a way of cementing Germany’s economic and political position and tying its empire together, which has led to today’s direct comparison with the BRI (Doshi 2021: 236). Given these precedents, the scale of the BRI across countries and continents encompassing more than 65 percent of the world’s population, the network of associated institutions such as the AIIB, and the BRI’s increasingly close associations with new technology, it is difficult to underestimate the initiative’s long-term potential. There are already indications of this. Chinese efforts to promote high-speed railway development in other countries have gone hand in hand with agreements that would broaden and deepen cooperation in military affairs, culture, research, and education (Rolland 2017: 103–104). In other words, contemporary infrastructure projects, as so often before, have served as a spearhead for broader forms of political and economic integration.

Moving Beyond Infrastructure Above and beyond this, the BRI has spawned multiple belts and multiple roads pitched at ever increasing levels of ambition. Among other projects and initiatives, the BRI has generated a Polar Silk Road, a Space Silk Road, a Digital Belt and Road (structured around fifth-generation [5G] telecommunications systems), a Health Silk Road, a green Silk Road, as well as a “spatial information corridor” based on the BeiDou satellite navigation network (Cronin 2021). As this list suggests, the BRI has been moving up the value chain. Indeed, the pace of Chinese technological advances, both inside and outside the framework of the BRI, was such that there were increasingly intense fears about Chinese involvement in 5G technology, artificial intelligence, and robotics. These overlapped and interlinked with concern about the BRI itself and more traditional Chinese infrastructure projects. At the same time, it also expanded spatially. Instead of being a Eurasian physical connectivity project, the BRI went global. Against this background, the slogans that framed the BRI in terms of “building of a Community of Shared Destiny” do not seem to be the absurd hyperbole of propagandists. While the Covid-19 pandemic, questions about the prospects for the Chinese economy, and widespread claims that BRI projects were environmentally unsustainable and burdened recipient countries

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with excessive debt led, as shown later in the book, to a partial reconfiguration of the BRI, it nonetheless remains a gargantuan project.

Levels of Analysis Most studies of US-China relations have been conducted at either a macro or micro level. Many of the former have drawn on the theoretical frameworks, such as realism, that define international relations as a discipline. Graham Allison’s (2017) invocation of the Thucydides Trap, whereby there is a likelihood of conflict when a rising power begins to challenge an established hegemon, has been widely cited. In contrast, those drawn toward the defining principles of liberal internationalists have held out hope that China could, despite its growing assertiveness, be drawn into the global order and the institutions that define it. The logic of participation within those institutions could, it was said, restrain and constrain China. Even where China established new, potentially rival, institutions such as the AIIB it would, the argument went, be compelled to win the confidence of partner countries and the financial markets if it were to secure credibility (Ikenberry and Lim 2017). The development of the AIIB suggests that there is a degree of validity to this claim. Other studies have, in contrast, adopted a micro-level approach and focused on the core personae and the character of the interactions between the United States and China (Davis and Wei 2020; Rogin 2021a). Seen in this way, US-China relations owe much to personalities and perceptions. Such micro-level accounts have emphasized the expectations among the Chinese leadership of a Hillary Clinton victory in the 2016 presidential election, the lack of preparedness for the possibility of a Trump presidency, and, as a corollary, uncertainty about its strategic intentions and the options open to Beijing. In a similar vein, accounts of policy processes in Washington have pointed to the lack of coherence and direction within the Trump team. There were not simply hawks and doves when it came to China, but factions and fractures within both sides (Rogin 2021a: 17). Thus, while the administration asserted publicly that it was pursuing a “whole of government” approach that brought together the different departments and agencies, there were profound tensions that were compounded by the unpredictable character of the president’s statements and tweets as well as his mercurial personality. The Trump White House championed protectionist trade policies and often seemed to regard its military commitments across Asia as a bargaining counter. This cut across efforts to build a common front against China. For other nations, including core US allies, more often than not, all of this led to “confusion, and occasionally derision” (Warren and Bartley 2020: 202).

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Unlike studies that use the macro- and micro-level frameworks, this book looks at the BRI through a meso-level lens. Such an approach is certainly framed by the structural challenges posed by a rising China as well as the internecine warfare that characterized the Trump White House. However, the emphasis is on broader policy development, implementation, impact, and feedback processes all the way through the Biden administration.

Conceptual Frameworks In adopting a meso-level approach, the book draws on three conceptual frameworks that are more usually employed in accounts of domestic policy development. The first is historical institutionalism. Like all the “institutionalisms,” historical institutionalism begins with the assumption that institutions should be understood in broad terms as encompassing rules, legislation, and policy legacies as well as more formal structures. By definition, all have a degree of stability and “stickiness.” They constrain and, at times, empower actors (Campbell 2004: 1; Pierson 2006: 115–116). Early accounts within historical institutionalism abandoned the models of policy formation, adoption, implementation, and review based on the policy cycle that once dictated the character of policymaking as a subdiscipline. Such models are rightly regarded as overly rationalist and technocratic. They do little or nothing to explain why reform efforts often fail or there is only limited scope for change. These early accounts also broke ranks with those who represented institutions or policy regimes as being simply a question of power whereby dominant elites have a free hand in imposing the policies that they so choose. As historical institutionalism took shape, studies of policy development drew on the concepts of path dependence and punctuated equilibrium. From this perspective, radical path-departing change generally takes place during short-term periods of crisis characterized by intense institutional and ideational flux. Such a period of crisis would in these accounts be triggered by an exogenous shock. For example, it took the Russian invasion of Ukraine in February 2022 to spark a seismic change in the character of Germany’s foreign, defense, and security policies pursued since the founding of the Federal Republic in 1949 (Schwarzer 2022). Once a policy path is established in such settings, it then remains in place, even if many actors regard the outcomes that it creates as suboptimal, over a long-term era characterized by relative institutional and ideational stability. From this perspective, it follows that both policy continuity and change can be understood in terms of punctuated equilibrium whereby there are long periods during which there are only limited, path-conforming changes that are then interrupted or “punctuated” by brief bursts of path-departing change.

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As historical institutionalism developed as a framework, the concept of punctuated equilibrium was eventually superseded by much more of an emphasis on incremental processes of policy change that over time eroded and transformed established policy regimes. Within this framework, there have been important studies of policy drift (whereby a policy changes in character as a result of shifts in the external environment) and layering (whereby a new institution is constructed “on top” of an established institution to undermine and weaken it over time). Related scholarship has also considered the types of “change agent” and the forms of reform strategies that they have adopted (Mahoney and Thelen 2010). These studies suggest that particular institutional settings, such as the number and character of veto points that can be used by wellplaced actors to block reform, or the opportunities that either exist or do not exist to create policy alternatives that will generate coordination effects, will facilitate the use of certain strategies by change agents. Certain settings offer strong veto possibilities through the capacity of the courts to strike down a regulation or law while, at the same time, public officials have little discretion in the interpretation and administration of that regulation or law. In such circumstances, head-on assaults or even more modest attempts by change agents to convert those policies or supplant them will probably be fruitless. Instead, therefore, change agents are likely to pursue a strategy based on seeking policy “layering.” Conservative efforts in the United States to weaken social security by promoting individual retirement accounts and other incentives to establish or increase private savings have been used to illustrate this (Hacker 2004). Nonetheless, while recent studies have focused on the ways in which, despite many veto points and other forms of obstacle, reformers have secured policy changes, this book emphasizes the ways in which such changes have been necessarily limited in scope. There are formidable domestic and international barriers limiting the opportunities open to actors. The book draws, in particular, on two notions that are associated with historical institutionalism. First, institutional density is important. This refers to the number of policy legacies and structures within a given policy arena. Since the Great Depression and World War II, most domestic policy arenas in developed countries have become dense indeed. This necessarily limits the options and space open to reformers and often compels them to pursue subterranean strategies whereby established institutions are adapted, rather than changed fundamentally, through processes of incremental change (Pierson 1996). Second, institutional strength (or weakness) can have significant effects and consequences. How should such strength or weakness be understood and measured? Studies of domestic policy development suggest that relative institutional strength should be understood as the gap between the outcome had the institution not been created and the

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outcome generated by the institution (Brinks, Levitsky, and Murillo 2019: 10). In simple terms, strength is the difference that an institution makes (Brinks, Levitsky, and Murillo 2019: 13–14). As a general rule, foreign policy arenas are less “crowded” and institutions are weaker than in domestic arenas. As the book argues, established institutions within the Indo-Pacific region tend to be significantly sparser and weaker in character than those in Europe. This provides a space for the creation of new institutions and structures, but there are nonetheless still challenges in creating new institutions on a significant scale. Those seeking to construct networks that could counter the BRI and China’s rise have therefore sought to collaborate with, and secure co-option by, established institutions. Second, the book is also indebted to foreign policy analysis (FPA). As it is a broad, catholic association of approaches that cuts freely across disciplinary boundaries, a reference to FPA is not sufficient in itself (Alden and Aran 2017). It is thus more accurate to say that the book is based on studies within FPA. In particular, it draws on the strategic-relational framework that addresses questions of structure and agency and the dialectical processes of interaction between actors and the contexts within which they operate. This framework suggests that alongside institutions policy, feedback, whether it be positive or negative, plays a pivotal role in modifying policies over time and either opening or closing opportunities for further change (Brighi 2007; Hay 1995). In other words, actors’ strategies are repeatedly reshaped and changed by what military observers like to call “events on the ground.” Third, the book is informed by studies of state capacity and the capacity of the American state to construct, maintain, and sustain the foreign policies it chooses to pursue. Most accounts of capacity have focused on developing countries. On this basis, “capacity” has been understood in terms of variables such as the state’s administrative and revenue-raising capacities (Hendrix 2010). The concept of capacity and these variables are also important in an American context. Accounts written within the framework of American political development (APD), a subdiscipline that straddles history, politics, and sociology, generally stress, as Chapter 8 records, the paradoxical character of US state capacity and have, for the most part, drawn on Stephen Skowronek’s celebrated description of the American state as a “hapless giant” (L. R. Jacobs and King 2009: 6; Orren and Skowronek 2004). Whereas European studies have often depicted the American state as small, it is, as the word giant infers, much more sizable than it may at first sight appear. The state’s size and scope are, however, hidden or subterranean because many state functions (and this is, e.g., evident in health provision) are exercised through private sector actors or at arm’s length from the central state. It has been credibly argued that its very lack of visibility makes it the object of

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protest and resentment at the hands of the conservative right. Its beneficiaries are, it has been said, often unaware that they are beneficiaries (Mettler 2011). Why, from the perspective of much APD scholarship, is the American state not only a giant, but also “hapless”? Despite its sprawling size, it is structurally weak. Not only are there fiscal strains because of the strength of antitax lobbies, but the state apparatus is also porous and exposed to penetration by particularistic interests, most notably through the “revolving door” between government service and commercial interests. The layer of political appointees that changes with every president and during a president’s term(s) of office, and the lack of professional expertise, limit collective experience and institutional memory. At the same time, there are cross-cutting and uncertain lines of accountability and patterns of uncertain jurisdiction, as departments and agencies seek to assert themselves (L. R. Jacobs and King 2009). The book suggests that these defining characteristics of the American state as well as the governing dynamics of policy development considered by historical institutionalism not only shape the making and remaking of domestic policy, but also inform and structure the character of foreign policy making processes. Certainly, they contribute to an understanding of the ways in which the United States has, and has not, been able to respond to the rise of China and Chinese-led projects such as the BRI.

Structure of the Book After this introductory chapter, which establishes a framework for the book, Chapter 2 considers the shifting US mood toward China over recent decades and the ways in which this paved the way for Trump’s turn toward much more abrasive and competitive forms of policy. Chapter 3 then moves away from this broader context and turns to consider US perceptions of the BRI. It looks at the ways in which it was understood by those within the federal government and those in the broader “knowledge regime” constituted by think tanks and other research organizations based largely in Washington. It asks why perceptions of the BRI became much more critical from about 2017 across the political divide despite the intense partisan polarization that defines US politics today. From Chapter 4 onward, the book provides a detailed and comprehensive study of the different and generally disparate policy responses to the BRI. Chapter 4 assesses US efforts to create alternative models of, and routes toward, infrastructure development particularly within Asia. These efforts were, like the proposals for domestic infrastructure projects put forward at about the same time, structured around the assertion that relatively small amounts of public funding could be used to leverage (or kick start)

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far larger amounts of private capital. Within this context, Chapter 5 looks at the creation and evolution of the Blue Dot Network, created to vet and certify proposed infrastructure projects, which became adjoined to the Organisation for Economic Co-operation and Development (OECD) once President Biden took office at the beginning of 2021. Chapter 6 examines US capacities and the country’s ability to counter Chinese efforts across the Indo-Pacific region, through either its own resources or in conjunction with allies and partners. Chapter 7 then assesses the Trump and Biden administrations’ efforts to secure a common front with the European Union, rein in those European countries that were engaging with the BRI, and curtail the activities of European firms that were considering cooperation with BRI projects in Asia and Africa. Chapter 8 surveys Build Back Better World (B3W), which was launched by President Biden as a further initiative at the Group of 7 (G7) summit in June 2021, but also considers the attempts by the Biden administration to invoke the challenges to US competitiveness posed by the BRI and China to call for large-scale public investment in physical and “human” infrastructure within the United States itself. The book’s conclusion (Chapter 9) draws together the overall US policy record, under the Trump and the Biden administrations, in countering the BRI. In the following chapter, I consider the broad context in which policy toward the BRI was shaped by surveying the deterioration in relations between the United States and China during the years preceding the 2016 presidential election, as well as the policy shifts that took place once Donald Trump secured the presidency.

Notes 1. The term strategic competition had been used previously within the federal government from the early 1990s onward, but not on a systematic basis. It appeared, for example, in the 2001 Quadrennial Defense Review (Blumenthal 2020: 119). 2. Before his administration’s policy took shape, Donald Trump and his team were reportedly asked at a meeting held during the transition period with the former Chinese ambassador to support the BRI publicly. The incoming national security advisor, Michael Flynn, is said to have offered praise (Rogin 2021a: x–xi). 3. The Twenty-first Century Maritime Silk Road was announced by President Xi Jinping in Indonesia a month after the announcement of the Silk Road Economic Belt in Kazakhstan (Medcalf 2020: 103). 4. The Marshall Plan provided more than $140 billion (when measured in 2017 US dollars) while the BRI planned spending amounted to $4–$8 trillion (Cronin 2021). This was, however, only a relatively small proportion of total Chinese foreign direct investment. See the China Global Investment Tracker (American Enterprise Institute 2021).

2 Souring on China

When speaking to Fox News in May 2019, President Donald Trump lambasted his White House predecessors for having been “weak” toward Beijing. This had been a recurring theme in his 2015–2016 election campaign and continued after his inauguration. In particular, Trump often asserted, US political elites and large corporations had facilitated a surge of imports over the preceding decades that not only had destroyed the US manufacturing base, but also had allowed China to grow and assert itself as a regional and, increasingly, a global power: “They took advantage of us for many, many years. . . . And I blame us, I don’t blame them. I don’t blame President Xi. I blame all of our presidents, and not just President Obama. You go back a long way. You look at President Clinton, Bush—everybody. They allowed this to happen, they created a monster. . . . We rebuilt China because they get so much money” (Brennan 2019). Trump’s depiction of US relations with China drew on a broader populist and nationalist critique of globalizing processes by suggesting that US elites had, because of their self-interested attachment to “globalism,” betrayed the national interest through the promotion of trade, migration, and supranationalist modes of governance. Nonetheless, despite the hyperpolarization of the contemporary era, and the bitter hostility that Trump provoked across the left, relatively few actively dissented from his representations of past US-China relations or his repudiation of them.1 Democratic senator Elizabeth Warren, often seen as a guardian of the left’s soul within the Democratic Party, also repudiated past efforts at engagement with China (Steinberg 2019–2020: 119). Chuck Schumer, who led the Democrats in the Senate, similarly threw his weight behind calls for a radical policy shift: “As I’ve always said, when it comes 13

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to being tough on China’s trading practices, I’m closer to Trump than Obama or Bush” (Bryan 2018).2 One reason why Trump’s words had a resonance across the spectrum is that Beijing had few protective constituencies in the United States. Although there were certain firms that had a stake in Chinese markets, business organizations had stepped back from their initial enthusiasm. Furthermore, few dissented from claims that in the early years of the new century, both the United States and Europe had failed to challenge China’s efforts to circumvent World Trade Organization (WTO) rules and its use of the renminbi (RMB) exchange rate to secure a competitive edge over trading partners. Why had successive US administrations failed to be more assertive in their dealings with China? Instead, US policy had been focused on the Middle East, Afghanistan, and the war on terror. There was also a calculus that a more hard-line stance toward China could jeopardize access to Chinese markets by Western firms (Patey 2021: 152). For much of the period, the threat posed by North Korea also appeared to necessitate cooperation and collaboration. There were other barriers to policy change. The United States and, for that matter, China were not unitary actors in the way that accounts often suggest. Within the United States there were different constituencies and policy therefore was not only pulled in different ways, but at times disordered and fractured. And there was a degree of stasis. On the one hand, there were “economic nationalists” who argued that China was taking economic advantage of the United States. They found themselves in the same political corner as the “national security hawks” who emphasized China’s growing strategic leverage and the challenge to US hegemony that it represented. On the other hand, while much of the business community had pulled back from their early economic hopes some of those within it, who had trading and supply chain ties with China, were still ready to argue that coexistence between the two countries was possible and that China could be managed (Dollar et al. 2017: 4). Those in the mainstream foreign policy communities, whether realist or liberal internationalist, saw a place for cooperation as well as competition. This having been said, and despite Trump’s claims that Washington had always accommodated Chinese demands, there were at times severe bilateral tensions. In particular, there were recurring stresses around Taiwan, Beijing’s sovereignty claims in the South China Sea, Tibet, and human rights policies (Johnson 2000). Considered in overall terms, US-China relations in the years before President Trump’s inauguration were therefore multifaceted, variegated, and subject to cross-cutting pressures. In sum, as the US Department of Defense concluded, it was “a broad, complex relationship . . . that has both elements of cooperation and competition” (2015: 29). While the term itself was eschewed, containment could justly be added to the mix.

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“Responsible Stakeholder” The most widely cited statement about US policy toward China during the years following the granting of permanent normal trade relations (PNTR) and before Trump’s inauguration in January 2017 was that made by Robert Zoellick. He served as deputy secretary of state in the George W. Bush administration and later became president of the World Bank. He referred to China by invoking the phrase “responsible stakeholder.” These words have been held to be symptomatic of the flaws in US thinking during this period. That thinking either represented, it has been said, a failure to understand the realities of China or the conscious placing of elite interests above those of the nation. In using the term responsible stakeholder, Zoellick, however, was not seeking to describe what he regarded as the realities of contemporary USChina relations. His remarks to the National Committee on US-China Relations instead rested on the hope or aspiration that China would move beyond simple “membership” in the international system. The hope stemmed from two overlapping articles of faith. First, China was gaining much from global trade flows and the financial architecture facilitating them. It would therefore have no reason to damage or undermine the global order, but instead would have a direct stake in protecting and preserving that order. Second, it was held that the capacity of China to maintain its economic growth depended in large part on the willingness of the party-state to transform its character through the pursuit of liberalization measures, the openingup of markets, and the entrenchment of the rule of law. In making this case, which was shared by other China doves, Zoellick drew a sharp contrast between China and the former Soviet Union. The USSR had, particularly in the years before the death of Joseph Stalin in 1953, been committed to “radical, anti-American ideologies.” While Zoellick acknowledged China’s mercantilist features, the growing trade imbalances with the United States, and the scale of Chinese military modernization, China was not, in contrast with the USSR and Cold War communism, seeking to overturn the established global order, but was instead becoming networked within it (National Committee on US-China Relations 2005). It is fair to say that, despite the competing emphases and trajectories of different constituencies, Zoellick’s view captured the trajectories of both the Republican and Democratic mainstreams at that point in time. When President Bill Clinton was serving his second term, the administration had come to see policy in terms of enmeshing China in a web of interdependent relationships and a “strategic partnership” (Sutter 2013: 120). His successor, George W. Bush, had talked in relatively tough terms on the campaign trail by rejecting the concept of a “strategic partnership.” The incoming administration, in particular Condoleezza Rice as national security advisor

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and Donald Rumsfeld as secretary of defense, took a more realist approach than the Clinton team and had plans to change the overall character of the US-China relationship by stressing the need for cooperation with allies and partners in the Asia-Pacific region.3 This inevitably conveyed suggestions that there would be more of a “containment” strategy (G. Roberts 2014: 68–69; Delisle and Goldstein 2021: 10). Nonetheless, the attacks on September 11, 2001, uprooted US policy and triggered the war on terror. Singapore’s former UN ambassador, Kishore Mahbubani, aptly described it as “an incredible geopolitical gift to China” (De Luce 2021). In his 2002 State of the Union address, in words that seemed directed toward both China and Russia, President George W. Bush committed his administration to “erasing old rivalries” (White House 2002). While the war on terror was at times framed around democracy promotion, the logic of this commitment was not extended to China. This yielded dividends for the United States in that China offered a degree of support for the war on terror in its early stages through actions against money laundering, the sharing of intelligence, port security, and in the reconstruction of Afghanistan (Tucker 2013: 42).4 Against this background, and while there continued to be differences within the administration regarding China’s intentions across Asia, US policy moved toward a form of pragmatic engagement, thereby tacitly accepting Zoellick’s premise that China could indeed become a “responsible stakeholder” (Tucker 2013: 42). By 2004, Secretary of State Colin Powell felt able to declare US-China relations to be “the best they have been since President Richard Nixon first visited Beijing” (G. Roberts 2014: 65).

Policy Feedback As has been noted, policies generate feedback in that those policies trigger political, social, and economic processes that set the stage for further policymaking. In classic accounts, which focus on positive forms of feedback or, put another way, the emergence of self-reinforcing sequences, a particular policy path becomes increasingly resistant to path-departing change as institutional complementarities take shape and expectations become bounded (Mahoney 2000; Pierson 2000). A policy may thus become “locked in.” Nonetheless, as recent studies have argued, while policy feedback can take a positive form thereby reinforcing a particular policy path, it can also be negative or self-undermining thereby weakening that path over time (Béland, Campbell, and Weaver 2022: 60–62). Indeed, in almost every case, there will be elements of both. Feedback can be “positive, or selfreinforcing, and negative, or self-undermining feedback can occur simultaneously within the same policy program, in relation to different instru-

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ments, on different levels, and with the involvement of different sets of actors” (Polman and Alons 2021: 824). In such settings, where feedback is contradictory in character, this could lay a basis for policy stability or stasis because there would be, in effect, a stalemate as the different “sides” face off against each other. Or, alternatively, it may be that positive feedback around one dimension of a policy has led to lock in, and actor contestation thereby shifts across to another dimension of that policy (Moore and Jordan 2020: 292). That other dimension may simply be a proxy for more substantial matters. If US relations with China are considered, there was recurring negative feedback particularly during the first decade of the new century. Democratic senator Schumer was among those repeatedly citing what was seen as China’s currency manipulation insofar as the renminbi was being held at an artificially low rate of exchange. The status of Taiwan, the United States’ policy of strategic ambiguity, and arms sales to the island repeatedly gave rise to tensions. Freedom of navigation became a more pronounced policy challenge. Under the George W. Bush administration, the State Department and Treasury Department imposed a significant number of sanctions on Chinese entities (Boese 2008). The events in Tiananmen Square, in May– June 1989, continued to cast a shadow. President Bush himself used a visit to Beijing in August 2008 to call for religious freedom and press the rights of Christians in China (Fairclough 2008). Nonetheless, despite challenges, strains, and seeming policy shifts, the commitment to pragmatic engagement remained in place up until late 2017. This was only partly a consequence of the US policy focus on the Middle East. There were also forms of positive feedback that countered and checked the more negative dimensions of the policy and, at least in the short run, bolstered the established US-China policy regime. First, despite frustrations with the Chinese regulatory regime, US-based multinationals continued to have hopes of maintaining their foothold in Chinese markets (Freeman 2013: 183; Sutter 2013: 118). Second, the dramatic increase in trade, particularly the growth of imports into the United States, when taken together with the pegging of the renminbi at a rate of 8.3 to the US dollar until 2005, created the basis for large-scale Chinese purchases of US financial assets. Indeed, by 2008 about 70 percent of China’s foreign exchange reserves were in dollar-denominated holdings (Tucker 2013: 42). It has been suggested that the seeming reluctance of the United States to invoke WTO rules and impose tariffs to alleviate the impact of import surges in hard-hit sectors (few cases were brought) can in part be attributed to fears of a large-scale selling of bonds (Davis and Wei 2020: 128). Third, the formal relationships between Washington and Beijing that had been established laid a basis for the emergence of personal connections

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and networks.5 This bolstered a belief across much of the US government in the efficacy of private channels. As a corollary, however, there were concerns that this form of personal diplomacy would be placed in jeopardy if there were public criticisms of China that went beyond accepted bounds. Hank Paulson, former Goldman Sachs chief executive who served as President George W. Bush’s treasury secretary, later recalled the importance of his personal networks in bringing about agreement around energy policy and product safety. The relationships that developed were also, according to Paulson, to prove pivotal in persuading Beijing to allow the renminbi to appreciate in value (it rose against the US dollar by 13.8 percent between September 2006 and January 2009) and in addressing the global financial crisis (Paulson Institute 2020). Other events, developments, and processes also played a part in bolstering the commitment to pragmatic engagement and confirming that China could indeed, and despite growing strains, come to serve as a responsible stakeholder. China appeared committed to regional institution building and in October 2003 signed the Association of Southeast Asian Nations (ASEAN) Treaty of Amity and Cooperation aiming to establish an East Asian Community structured around economic, social, and security cooperation (Van Ness 2004–2005: 42). Furthermore, while there was increasing concern throughout this period about China’s growing capabilities, there still were huge structural imbalances between the United States and China in terms of economic and military capacities and this in itself allayed US fears. While the most outspoken critics of China were in Congress rather than the executive branch of government, the Senate and the House of Representatives did relatively little to put the words of its members into practice. There were different, but related, reasons for this. The period after the September 11 attacks was characterized by deference toward the White House (Sutter 2013: 110). Although the Democrats secured majorities in both congressional chambers from the beginning of 2007 onward, only a limited number of political levers could be pulled. Furthermore, although issues such as the trade imbalance, the dollar-renminbi exchange rate, and Tibet were raised, leading Democrats were closely aligned with business interests which, at that point, still regarded Chinese markets in hopeful terms and were wary of antagonizing Beijing (Sutter 2013: 111). Indeed, during the Bush years, there was a growing dialogue between Congress and their Chinese counterparts through visits and exchanges (Sutter 2013: 112–113). The policies adopted in the wake of the global financial crisis of 2008, the causes of which owed much to the macroeconomic imbalances between China and the United States, provided more positive forms of feedback at least during the crisis itself.6 It bolstered faith in the policy of pragmatic engagement but, at the same time, set processes in train that were to weaken it. There were initial reports and fears that China might (perhaps in

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conjunction with Russia) “dump” US Treasury holdings that it had accumulated through its trade surplus with the United States, which has in turn owed much to the undervaluation of the renminbi. A large-scale selling of bonds would trigger significant increases in interest rates. Nonetheless, China was to prove “responsible” in its responses. As Paulson remarked in an address to the National Committee on US-China Relations in New York: “It is clear that China accepts its responsibility as a major world economy that will work with the United States and other partners to ensure global economic stability” (New York Times 2008). Indeed, in 2008, China provided an estimated $500 billion of financing to the United States through asset purchases, primarily Treasury bonds (Setser 2009). This form of action by China appeared to confirm the value of the personal networks that figures such as Paulson had constructed and the value of forums such as the Strategic Economic Dialogue (Paulson 2010: 52–53). In fact, it was reported that George W. Bush made a personal request not to sell (Davis and Wei 2020: 99). China showed its sense of economic “responsibility” in another way by taking similar steps to those pursued in the West. It established a fiscal stimulus program amounting to 12.5 percent of gross domestic product (GDP) in 2008. According to most estimates, it was the biggest such stimulus package across the globe, as well as triple the size of the American Recovery and Reinvestment Act (Breslin 2012; Wong 2011: 2). Nonetheless, positive and negative feedback processes can have different time horizons. While the Chinese stimulus was hailed during the crisis as an important boost to the process of stabilizing demand, thereby helping the global recovery, this form of fiscal statecraft fueled Chinese economic and strategic assertiveness and the stimulus itself contributed over time to significant overcapacity in core industrial sectors within China. The stimulus thereby set the stage for later developments (Davis and Wei 2020: 109–111).

Pivoting and Rebalancing There initially was significant policy continuity between the George W. Bush and Barack Obama administrations. Obama was the first US president to visit China during his first year in office. The realization of climate change goals required Chinese cooperation although the 2009 Copenhagen Climate Change Conference proved a disappointment. The Obama administration’s 2010 National Security Strategy reaffirmed that the United States would “continue to pursue a positive, constructive, and comprehensive relationship with China” (as quoted in Delisle and Goldstein 2021: 10). Nonetheless, policy began to shift, although the character of that shift was not always fully evident. There were bitter clashes about freedom of

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navigation in the South China Sea arising from Secretary of State Hillary Clinton’s speech to the ASEAN Regional Forum in July 2010, although the administration was later to be criticized for weakness and uncertainty following the 2012 confrontation between China and the Philippines over the Scarborough Shoal. Then, President Obama’s speech to the Australian parliament in November 2011 marking the sixtieth anniversary of the Australia, New Zealand, United States (ANZUS) Security Treaty announced an important turn: “Our new focus on this region reflects a fundamental truth—the United States has been, and always will be, a Pacific nation. . . . As President, I have, therefore, made a deliberate and strategic decision— as a Pacific nation, the United States will play a larger and long-term role in shaping this region and its future, by upholding core principles and in close partnership with our allies and friends” (White House 2011). Although not publicly represented as a response to China’s rise and, instead, framed as a reassertion of the United States’ historic presence in the Pacific, it would be difficult to argue that the “Pivot to Asia” or process of rebalancing was not shaped by China’s economic and strategic might.7 Indeed, it has been described in very direct terms as “a fundamental reorientation of US grand strategy towards exerting systematic geopolitical, diplomatic, and economic pressure balancing against China’s rise” (Rolf 2021: 234). Certainly, there were pressing reasons why the United States had to assert itself in the Asia-Pacific region. China’s development of its precision-guided strike capabilities placed US bases in Japan, South Korea, and Guam in jeopardy and limited the capacity of these bases to project US power. There were, furthermore, growing fears that the construction of artificial islands, which were then militarized, constituted an area-denial strategy. It appeared to imperil freedom of navigation in the East and South China Seas by naval forces and threaten the transit routes used by maritime commercial traffic (US Department of Defense 2012: 2). Beijing’s actions were, it was said, creating tensions and stresses with Southeast Asian nations, most notably the Philippines, and in the longer term establishing China as an undisputed regional hegemon (Swaine 2015). Nonetheless, this was not a forgone conclusion. In developing a strategy to counter China, the United States as well as its allies and partners in the Indian Ocean found new opportunities. These opportunities arose because China depended on seaborne trade, including energy imports (Heinrichs 2011). Against this background, and before the speech to the Australian parliament in Canberra, Obama and Australian prime minister Julia Gillard announced the deployment of a US marine air-ground task force to be based in Darwin by 2017, as well as that there would be an increase in the number of US planes and vessels passing through Australian bases (Tucker 2013: 44). All this was possible because, although US military operations continued in Afghanistan and the Middle East, troop numbers were far

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below what they had been during the preceding decade. Furthermore, Ashton Carter, widely described as a hawk, was appointed defense secretary in early 2015. Together with other changes in personnel within the Department of State and the National Security Council, this appeared to confirm that the United States would assert its right to “fly, sail, and operate wherever international law allows” with increasing vigor (Whitlock 2015). The Pivot to Asia had an important economic corollary in the TransPacific Partnership (TPP). The TPP was a plan for a free-trade area, initially bringing together nine countries across Asia, Australasia, and the Americas (Delisle and Goldstein 2021: 11).8 As the TPP was taking shape, it was said that while there was no wish to exclude China, there were doubts as to whether China would “be willing or able to meet the strict standards” (Chi 2015: 90). The TPP would facilitate economic growth and strengthen multilateral institutions. Toward the end of Obama’s second term of office, the framing shifted in character, and China had become a more visible target. In early 2016, Obama framed the TPP as a means by which China could be constrained by limiting its ability to set the rules for trade across the AsiaPacific: “TPP allows America—and not countries like China—to write the rules of the road in the 21st century, which is especially important in a region as dynamic as the Asia-Pacific” (White House 2016). At the same time, the United States was also increasingly emboldened in its public criticisms of Chinese economic practices and the challenges faced by Western firms seeking access to China’s markets. Even in January 2011, when President Hu Jintao visited Washington, Obama pointed in vocal terms to what was seen as discrimination in Chinese government procurement contracts, intellectual property “theft,” the continuing undervaluation of the renminbi, and the need, more broadly, for further liberalization (Chi 2015: 83). While Obama’s speech to the Australian parliament included references to cooperation and a “partnership,” particularly around North Korea, and a call for a “greater cooperation between our militaries to promote understanding and avoid miscalculation,” it was clear that there was a reduced faith in the efficacy of private channels (White House 2011).9 In sum, China was now increasingly seen, in an adaptation of Zoellick’s phrase, as a “selective stakeholder” (Etzioni 2014). Despite these shifts and a growing abrasiveness of tone, there still was nonetheless a significant degree of hedging and caution. When Xi Jinping visited the United States in September 2015, President Obama referred to Tibet and again pressed the importance of freedom of navigation in the East and South China Seas. However, these comments were sandwiched between examples of cooperation between the two countries. Obama announced a “common understanding” on the use of cyber espionage for commercial gain and welcomed China’s moves to limit greenhouse gas emissions (White House 2015).

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Establishing the Belt and Road Initiative The Belt and Road Initiative (BRI) was formally launched in 2013 and is often described as Xi Jinping’s signature project. Although pitched by Beijing in universalistic terms, it initially appeared to commentators as a response to overcapacity in core industries and the saturation of Chinese markets (which was, in part, produced by the over-stimulation of the Chinese economy at the time of the 2008–2009 financial crisis), and the need for energy imports as well as food security (OECD 2018: 14). The BRI also assisted in opening up the country’s westward provinces, not least Xinjiang, in growing economic integration with the countries of Central Asia, and in expanding export markets for state-owned enterprises as well as private companies (Rolland 2017: 96).10 At the same time, there were openings for the BRI in that it went toward meeting the vast infrastructural needs of the Eurasian and Southeast Asian regions that Western governments and international economic organizations, such as the World Bank, had failed to address. The BRI was seen by some, furthermore, as a form of pushback against the Obama administration’s Pivot to Asia (Chatzky and McBride 2020). Nonetheless, while the BRI is often depicted as a centralized or centrally directed project arising from the logics of great-power politics or economic expansionism, it has a more blurred and uncertain character than these accounts suggest. The structures and the boundaries of the Twentyfirst Century Maritime Silk Road, which sought to develop sea trade routes such as the Malacca-Suez route through the Indian Ocean, the Oceania– South Pacific Blue Economic Passage linking China to Australia, the Silk Road Economic Belt providing overland trade connectivity across Eurasia, as well as other BRI projects were muddied. It had a porous character. The dividing line between the public and the private was imprecise, although there were suggestions that the initiative was a means of bolstering and strengthening the Chinese state sector while as a corollary weakening private interests (Blumenthal 2020: 6). Furthermore, there was often ambiguity about what was—and was not—a BRI project. Some contracts had an uncertain character. Indeed, there was often a degree of what has been termed intentional ambiguity about the agreements that were concluded under its auspices that in practice gave China disproportionate leverage in any negotiations that might ensue (Akaha, Yuan, and Liang 2021: 190). This having been said, Western commentators increasingly focused on the strategic and security implications of the BRI. It was easy to represent as a grand strategy that would enhance China’s strategic standing and, as a corollary, reduce US influence (A. Gupta 2018: 45–46). On top of this, the growth of the trade routes and the creation of the Maritime Silk Road appeared set to create fairly immediate security logics. The reliance (particularly for energy supplies) on trade routes through the Indian Ocean has led

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China to protect these through a naval presence, establish port facilities to refuel or resupply its naval vessels, engage in antipiracy operations, and seek ways of countering the navies of other nations in the region (Szechenyi 2018: 3). The BRI seemed likely to bolster those who talked of the “string of pearls,” a framework that suggested China was establishing military and commercial bases across the Ocean, thereby encircling India (Holt 2020). Furthermore, as the BRI moved beyond the provision of hard infrastructure to incorporate digital, financial, political, and security platforms, each triggered further strategic questions and concerns (Economy 2022: 92).

Institutional Weakness and Negative Feedback Notwithstanding the negative feedback that seemed set to erode the strategy of pragmatic engagement and open the way for policy alternatives, the commitment to engagement largely remained in place, as it had momentum that carried it forward. Having said that, and although policy paths are “sticky” and resilient to change, there are differing degrees of “stickiness.” Certain paths will be weaker or stronger than others (Brinks, Levitsky, and Murillo 2019: 10). This has consequences because a weak regime can open up opportunities for far-reaching reform, while a resilient regime can close off those opportunities for change (Ashbee and Hurst 2023). The US-China policy regime that governed trade relations and laid a basis for engagement between both countries in the new century was indeed relatively weak. Permanent normal trade relations had been sold by the Clinton White House on the basis of a “larger national interest” and assertions that PNTR offered an opportunity to shape China’s future direction. This, however, opened up the potential for a later backlash and other forms of negative feedback when such ambitions were not realized (K. Weaver 2010: 139). Furthermore, the contestation processes at the time PNTR were established crossed party lines, thereby limiting the scope of engagement with the issue and ensuring that contestation remained largely elite based. A Gallup survey in May 2000 found that only 29 percent claimed to be following news about China and the WTO either “very” or “somewhat” closely (Jones 2000). In sum, the ties that were established between the United States and China through PNTR were weak and had limited legitimacy among the American public. The policy regime was thus vulnerable to the later efforts of reformers. China’s growing economic power fueled further forms of negative feedback that became pronounced in the second decade of the new century. This compounded the relative weakness of the US-China policy regime. First, although often referred to as a “shock,” suggesting a sudden and unexpected event, the effects of imports on the US heartland progressively took a toll,

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and there was an increasingly visible bifurcation of the US economy and society on the basis of skill (Autor, Dorn, and Hanson 2016).11 Estimates suggested that imports from China led to the loss of 982,000 jobs between 2000 and 2007 (Irwin 2017: 667). An Economic Policy Institute (EPI) report put the figures rather higher. It suggested that the trade deficit with China resulted in the loss of 3.4 million American jobs between 2001 and 2017. About three-quarters of these were in manufacturing (Scott and Mokhiber 2018: 2). Such losses, which were concentrated among those who lacked transferable skills, were in part obscured by the housing construction boom during the early years of the new century that drew in labor. The losses were concentrated and increasingly visible, in some localities, whereas the more indirect forms of employment that trade with China created were largely dispersed. Second, while there were expectations of large-scale US direct investment in Chinese markets, there had been relatively little consideration given to Chinese foreign direct investment (FDI) in the United States and other Western countries. However, it accelerated from 2010 onward and, by 2013, had overtaken US FDI in China, although it remained small compared with other sources of FDI (Rhodium Group 2021: 1). The Netflix documentary American Factory showed the human impact of this and the tensions that arose at a glass-manufacturing plant in Ohio (Netflix 2019). Third, there were negative feedback effects associated with the WTO, which had been hailed in 1999–2000 as an effective arbiter and guarantor of trading relationships. These effects were a consequence of endogenous forms of change within the WTO. Whereas the United States had been hegemonic, there were, by 2016, four or five major national players. Most notably, China gained in relative importance. It contributed an increasing share of the WTO budget that, as a corollary, raised its influence (Yoshikawa 2015: 5–6). Furthermore, there seemed to be no WTO enforcement mechanisms so that China would be required to fulfill the commitments it made on accession. At the same time, decisions appeared to go against the United States. It was, for example, ruled that the methodologies the United States used for assessing dumping when cases were brought were not compatible with the WTO rules. This had significant political consequences: “The WTO rulings that restricted the use of special tariff policies, forced upon the US a level of trade liberalization that the domestic population, or at least a part of the domestic population, really did not want” (Crowley 2018: 8). Fourth, certain Chinese investments triggered security concerns. Although the USA Patriot Act of 2011 restricted the ownership of “critical infrastructure” by foreign entities, significant numbers of acquisitions were in sectors that led some to raise questions about potential security implications (Aoki et al. n.d.: 10). In particular, there were concerns about invest-

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ment in infrastructural development, electronics (including semiconductors), as well as information and communications technology. While much investment was through acquisitions, there were also new developments. These include Huawei’s new research and development (R&D) center in Seattle and LeEco’s new headquarters in California (Hanemann, Rosen, and Gao 2017: 30–32). Alongside these fears, there were claims that proprietary technology would be taken out of the United States through these firms or that there would be thefts of US intellectual property (Aoki et al. n.d.: 16). Commentators emphasized the close connections between Chinese firms and the state apparatus. While ownership is often hidden through the use of subsidiaries, and large parts of the private sector have close ties with the state, the place of state-owned enterprises in the United States gave rise to particular concern. A 2012 estimate suggested that Chinese state-owned enterprises (defined as those in which the Chinese government held more than 20 percent of the shares) accounted for 64 percent of the total deal value (Aoki et al. n.d.: 8–9). Fifth, particular institutional structures and configurations can shape opinion and thereby contribute to processes of policy change. When China policy is considered, institutional shifts within the federal government ensured that security questions (including the transfer of technology from the United States to China) and human rights secured greater attention and thus moved up the policy agenda. The Committee on Foreign Investment in the United States (CFIUS) was established in 1975. It spans different executive agencies and has a broad mandate to consider the foreign acquisition of US firms, particularly those in critical infrastructure. China was increasingly at the core of its deliberations. CFIUS’s remit included investments involving Chinese state-owned enterprises and those that could give Chinese investors access to the US financial system, personnel details, and certain sensitive technologies such as semiconductors or physical acquisitions in close proximity to US government facilities or places of strategic importance (Jones Day 2018). CFIUS was bolstered and reinforced in 2018 through passage of the Foreign Investment Risk Review Modernization Act (FIRRMA), which has been seen as contributing to the decoupling processes between the United States and China that some regard as an increasingly pronounced feature of contemporary geopolitics (Khanapurkar 2020). The creation of other institutional structures also had long-term consequences. The Congressional-Executive Commission on China was established in October 2000 with a mandate to monitor rights and the rule of law (Sutter 2018: 114). It consisted of nine senators and nine members of the House of Representatives as well as five officials appointed by the president (Congressional-Executive Commission on China 2018). At the same time, the US-China Economic and Security Review Commission was established “to monitor, investigate . . . the national security implications of the bilateral

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trade and economic relationship between the United States and the People’s Republic of China” (US-China Economic and Security Review Commission 2022). These bodies and their reports also provided an enduring, institutional focus on the areas of Chinese policy that the country’s critics found most troubling. In other words, they offered such critics a platform and plentiful supplies of political ammunition (Sutter 2013: 119–120). Sixth, although overall US investment in China continued to grow, business interests and the organizations tied to them increasingly lost some of their former faith in the potential offered by Chinese markets (Davis and Wei 2020: 121). Costs were rising. Ambitions had to be scaled down. Certain firms hedged by shifting production to Southeast Asia. Key sectors had been swamped by overproduction. Furthermore, the onerous contractual requirements imposed on Western and Japanese firms that the technology necessary for production and development be transferred to Chinese enterprises had a long-term impact. For example, after initially engaging with foreign companies, China itself began to design and produce new generations of high-speed trains (Davis and Wei 2020: 122). Furthermore, there was a growing belief that the commitment to industrial policy and mercantilist practices had become an entrenched feature of the Chinese economic and commercial landscape. Complaints by firms about government procurement practices, the hidden privileges given to state-owned enterprises, and intellectual property theft continued unabated. One estimate suggested that, in 2017 alone, such theft could be valued at $600 billion (Economy 2018: 19). On top of this, the future seemed uncertain for an increasingly broad range of business interests. The publication of Made in China 2025 suggested that China was committed to challenging the US lead in terms of high-tech capabilities (Center for Security and Emerging Technology 2022). US firms in high-tech sectors would, it was said, be displaced. Then, in May 2020, Beijing announced its “dual circulation” strategy, which sought to boost domestic innovation and markets while reducing dependence on foreign economies (Thompson 2021: 17). Against this background, and although there were significant differences between sectors, there was muted but growing uncertainty among US businesses active in Chinese markets about the country’s trajectory. Increasingly, the early belief that Western firms stood to make huge inroads across China were reined in and chief executive officers (CEOs) began to think in more defensive terms about maintaining the market share they had secured. According to a 2017 AmCham China survey, 80 percent of firms felt that foreign businesses were “less welcome in China than before” (AmCham China 2017: 30). It also found that 25 percent of companies were moving or planned to move capacity out of China, not only because of regulatory challenges but also because of rising labor costs and, within this context, a strategic reprioritization of other countries (AmCham China

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2017: 35).12 Although peak business organizations such as the US Chamber of Commerce continued to make the case for trade with China and opposed protectionist measures, they did not make the case in particularly forceful terms. Seventh, these developments had consequences for the character of the Republican Party and explain the reasons why President Trump’s turn against China in 2017 secured backing from across the party’s ranks. Business interests had long been closely aligned with economic conservatives and organizations such as the Club for Growth within the Republican Party. Their focus was on questions such as the prevailing tax rate, the levels of government spending, and the character of regulations governing particular markets. When PNTR was enacted at the turn of the new century and China joined the WTO, business organizations, economic conservatives, and allied think tanks such as the Heritage Foundation stressed the commercial opportunities and asserted that growing trade would lead to liberalization (Dumbaugh 2000: 24). At this point in time, business interests and economic conservatives were in opposition to religious and social conservatives, another important Republican constituency that emphasized the importance of faith as well as moral and cultural questions such as abortion and same-sex marriage. Religious conservative organizations, such as the Family Research Council (FRC) and Concerned Women for America, pointed to what they saw as the persecution of Christians in China and its use of “coercive family planning” through abortion, forced sterilization, and the one-child policy (Dumbaugh 2000: 17–18). Religious conservatives remained a sizable and structured constituency in the decades that followed. In the 2016 presidential election, White born-again evangelical Christians, who form the backbone of the movement, constituted 26 percent of the electorate. Of these, 81 percent backed Trump (Martínez and Smith 2016). Their opposition to China remains pronounced. Organizations such as the FRC not only champion the rights of Christians in China, but have backed a much broader critique of what is sometimes still called the “Maoist regime” (Decker and Triplett 2011: 8). From their perspective, China’s intentions have remained largely unchanged since the founding of the People’s Republic. A book promoted by the FRC and the Washington Times indicted China for the use of forced labor in the Xinjiang region, its actions in Tibet, its levels of pollution, the military threat posed across the Asian region, and what was represented as China’s tacit support for North Korea and other rogue states. From their perspective, the United States was in decline as a consequence of actions by Democrats and the left, their commitment to the growth of big government, and their belief in a “post-American world.” This lack of faith in the United States’ traditional strengths was allowing China to emerge as the preeminent superpower (Decker and Triplett 2011: 175–178).

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The shifts within business communities between 2000 and 2016 as disenchantment with China grew brought economic conservatives together with religious and moral conservatives. Changing perceptions of Chinese actions in the South and East China Seas also had an impact on their thinking (Tucker 2013: 43). In sum, the principal constituencies that had dominated conservatism and Republican Party politics up to 2016 were increasingly at one in making the case for a more abrasive policy stance toward China. Certainly, the divide between economic conservatives and others that had been so marked in the 1990s was a thing of the past. There were signs of this during the 2012 Republican presidential primaries as candidates vied with each other to attack China and Chinese practices (Sutter 2013: 114). In sum, by the time President Obama left office, there had been a significant degree of coalescence among different Republican constituencies. They rallied around the conclusion that the United States had to take a much more confrontational stance toward China. Eighth, there were also shifts among Democrats. The changes in the structural character and composition of the labor unions, an important Democratic constituency, had consequences. By 2008, for the first time, the number of public sector workers in unions exceeded the number in the private sector. The fall in union membership within the manufacturing industries was particularly striking. By 2009, when Obama took office, just 10.9 percent of employees in the manufacturing sector were union members (TED: The Economics Daily 2020). In other words, those most vulnerable to Chinese imports and other forms of foreign competition had fewer resources and less of a voice within the Democrats’ ranks. Nonetheless, Democratic candidates still sought the votes of union members and others in core industries. As the 2016 elections came into view, the TPP was sold in increasingly forceful terms by the Obama White House as a means by which the United States, rather than China, sets the rules for a significant share of global trade. The contrast between President Obama’s framing of trade with China and that used by President Clinton a decade and a half earlier was striking. The 2016 Democratic presidential election platform included a pledge to “work with our allies and partners to fortify regional institutions and norms as well as protect freedom of the seas in the South China Sea” (Democratic Platform Committee 2016: 44). Furthermore, the Democratic platform committed itself to human rights, referred specifically to Tibet, and asserted that the party would “stand up to Beijing on unfair trade practices, currency manipulation, censorship of the internet, piracy, and cyberattacks” (Democratic Platform Committee 2016: 44). Having said this, there still was, however, a degree of caution, and overall party policy thereby remained ambivalent. Alongside the more strident pledges, the 2016 platform also called for cooperation with China around, for example, climate change and nuclear proliferation. The One

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China policy was reaffirmed and the assurances to Taiwan were equivocal (Democratic Platform Committee 2016: 44).

Triggers and Threshold Effects Policy shifts, however seemingly sudden or dramatic and whether taking place in the domestic or foreign policy arenas, invariably have antecedent conditions and are a culmination of long-term processes. Within this context, particular attention should be given to threshold effects. The term refers to the incremental processes that build up and accumulate over time until a critical level is reached (Pierson 2004: 83). There is an obvious comparison with the boiling of water, although the pressures for policy change are unlikely to take a unilinear form. The effects of demographic changes are an example in that long-term demographic shifts may, over a long-term period, create pressures for radical change that suddenly burst into the open. The emergence of the US civil rights movement owed much, it has been argued, to slow-moving structural developments, including the decline of the cotton industry between 1933 and 1954 (McAdam 1982: 94–108). Such threshold effects are particularly prevalent in settings where (1) actors face binary choices and (2) choices depend on perceptions of others’ intention (Pierson 2004: 84). Certainly, the pressures for change can in many cases be held down on a long-term basis by institutional inertia and, thus, accumulate until a breaking point is reached. What, from this perspective, brings about a crossing of the threshold? It may be that a change in the character of one institution or policy regime has wider consequential effects (Baumgartner and Jones 1993). Or there may simply be an accumulation that hits a tipping point. It has been argued by Carmen M. Reinhart and Kenneth S. Rogoff (2010) that, once a debt-toGDP ratio reaches 90 percent or more, economic growth would be held back. Alternatively, a small event may have a cumulative impact way beyond what could be expected if it acquires a symbolic significance. The number of people who are believed to be ready to undertake a particular course of action in such a context can at a certain point in time pass a threshold, thereby leading others to join that action. It may also be that threshold effects can arise from institutional interactions. It has been argued by new institutional economists that if a governance system provides “freedom of expression” and “democratic voting,” there will be economic growth. Singly, the effects were much more muted (Boudreau and Weller 2006: 6). Another approach is to suggest that there might be a moment of “cognitive liberation,” as it is called in social movement studies, through which a prevailing system or regime loses legitimacy and alternatives thereby

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secure a sense of efficacy. Preconditions provide “cognitive cues,” but more is required (McAdam 1982: 49–51). While the term cognitive liberation perhaps suggests too much drama for use in considerations of foreign and trade policy, it does convey that there is a short-term period during which the pressure for change and reform has its own independent and self-sustaining logic that becomes the prevailing consensus view.

The 2016 Presidential Election and Donald Trump An exogenous shock can also trigger change or, at the least, create the space for a radical shift in policy. Trump’s campaign for the Republican nomination, his surprise victory in November 2016, his mercurial character, and his assumed persona as a disruptive outsider constituted just such a shock. As has been widely noted, insofar as it had a clear political character, the Trump campaign was structured around conservative and nationalist populism. It championed the “people,” attacked established elites, held out the promise of America First, and sought to win the votes of the White working class.13 Populism is, by definition, a “thin” ideology (B. Stanley 2008). It is in effect encrusted on top of other ideologies; in this instance conservatism as well as the discourses and constituencies allied with it. Like other forms of populism, Trumpism was thus politically unstable and moved backward and forward between populist notions and more established conservative principles. If domestic policy is considered, earlier Republican marketization projects, such as the Ryan Plan that sought the partial privatization of Medicare, the reform of Medicaid, and established a basis for the overall weakening of social “entitlements,” were removed from the policy agenda. Protectionism, particularly the imposition of barriers on trade with China and Mexico, became an article of faith. At the same time, however, there was backing for tax cuts, deregulation, and the dismantling of Obamacare. For conservative populism and the Trump campaign, China initially served as a significant economic Other. Indeed, Trump had established his hostility toward China in the years preceding the campaign launch: “We can’t continue to allow China to rape our country and that’s what they’re doing. It’s the greatest theft in the history of the world” (Stracqualursi 2017). He promised furthermore that, when elected, his treasury secretary would label China a currency manipulator (Stracqualursi 2017).

Reconfiguring Policy The Trump administration made a fitful and uncertain start in policy terms. There was speculation when Xi Jinping met with the president in Florida in

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April 2017 that the United States and China might conclude a grand bargain. This would rest on a promise by the United States to stabilize bilateral economic relations by modifying the administration’s demands around trade and, in exchange, China would among other steps assist in reining in North Korea’s nuclear program. Trump was on record telling Xi: “But you want to make a great deal? Solve the problem in North Korea. That’s worth having deficits. And that’s worth having not as good a trade deal as I would normally be able to make” (Heinlein 2017).14 By late 2017, it was clear that despite the dysfunctional modes of decisionmaking in the White House, there had been a sharp policy shift. As 2017 progressed, notwithstanding evidence that sanctions were being enforced and taking more of a toll on North Korea, President Trump appears to have been turning toward a strategy based on the direct, bilateral approaches toward Pyongyang. This would have removed the need for the United States to continue as a supplicant to Beijing.15 At the same time, a grand bargain with China appeared to offer few dividends in terms of votes. Even those dubbed “panda huggers” within the administration, most notably Treasury Secretary Steve Mnuchin, appeared to have accepted there was a case for taking a tough stance to ensure that China offered foreign firms much greater market access on more transparent terms. Arguably, the character of the shift owed much more to the “adults in the room” around Trump than the president himself. The “adults” included figures such as Vice President Mike Pence, Secretary of Defense James Mattis, Secretary of State Rex Tillerson, White House Chief of Staff John Kelly, and National Security Advisor H. R. McMaster. The National Security Strategy published at the end of 2017 asserted as a starting point that “a geopolitical competition between free and repressive visions of world order is taking place in the Indo-Pacific region” (White House 2017: 45). At times, the administration, most notably Secretary of State Mike Pompeo, who became secretary of state in April 2019, appeared to embrace tropes that had formerly been associated with sections of the alt-right and former neoconservatives. These represented China as a Marxist-Leninist state seeking, through military might and internal subversion, to surpass the United States as a global hegemon. Indeed, some of Pompeo’s comments on China edged toward regime change. He argued that the United States should not only get “tough” with China, but it should also seek to “engage and empower the Chinese people” to change China from within (Pompeo 2020). Although there were periodic calls for cooperation, they should not be allowed to obscure the reality that the turn to strategic competition marked a significant shift in terms of policy and the paradigm on which it rested. Indeed, it can be legitimately described as proto-transformational (Ashbee and Hurst 2020). A transformational policy change rests on fundamental shifts in the character of dominant interests, institutions, and ideas, “American

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government and politics are transformed when new interests secure a firm grip on power, when institutional relationships are rearranged to support them, when government priorities are durably recast, and when a corresponding set of legitimating ideas becomes the new common sense” (Skowronek 2011: 171). Can this be said of the period 2017–2021? The policy shifts during the Trump era were hesitant, stumbling, and variegated. However dramatic paradigm shifts may appear, they do not eliminate all that came before. Indeed, they incorporate the ideational “detritus” of former frameworks and approaches (Lieberman 2002: 702). Even in 2018, after the policy of strategic competition had been embraced, President Trump intervened to reverse an order that had blocked Chinese tech giant ZTE (which depended on US components but had allegedly violated sanctions on Iran) from undertaking business with US companies (Thompson 2021: 16). The administration was torn for a period between those who sought a rebalancing of the US-China relationship but still believed a grand bargain could be secured, others who were committed to a containment policy, and those who considered ways in which the Chinese state could be undermined. While all subscribed, albeit to varying degrees, to the prospect of an economic decoupling between the United States and China, there were repeated strains (Rogin 2021b). Furthermore, members of the Trump administration sporadically attempted to assert that the initiatives that they endorsed, such as the Free and Open Indo-Pacific (FOIP), were not specifically directed against China. Speaking at the 2018 Shangri-La Dialogue, Secretary of Defense Mattis included a comment that there was space for China to “play a role in shaping the regional order.” He also stated that he would welcome bilateral cooperation between Beijing and Washington when opportunities arose (Kliman and Grace 2018: 16). Even in September 2020, some statements of policy indicated that there was still room for forms of cooperation: Our competition with the People’s Republic of China need not lead to conflict. . . . We will also seek to cooperate with China in those areas where our interests align and remain committed to achieving progress on a broad range of topics, including resolving trade inequities, achieving DPRK denuclearization, and stemming the deadly, unacceptable flow into the United States of fentanyl, whether manufactured in China or made elsewhere with Chinese precursors. (Stilwell 2020)

Nonetheless, notwithstanding these periodic references to cooperation, evidence of what can be regarded as a policy prototransformation began to become visible. In terms of policy goals, there had been a significant shift away from the war on terror and the policy priorities that had defined George W. Bush’s administration and to a degree the Obama White House. As Secretary of Defense Mattis wrote, “Great power competition, not terrorism, is

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now the primary focus of US national security” (Kaplan 2021: 332). And Trump himself repeatedly repudiated many of the shibboleths that had defined the liberal internationalist era. Within this context, China was represented as a “revisionist” power seeking to overturn the established order. The frame within which the relationship with China was represented not only had an ideological or, for that matter, strategic character, but it was also an economic war to be fought through the imposition of tariffs and other protectionist measures. There was increased talk of economic “decoupling” between the United States and China as well as strategic competition (Thompson 2021: 11). And as noted above, the frame also alluded to the prospect of regime change. It drew a sharp distinction between the people and the governing regime: “The competition with which we are faced is not China versus the United States. It is the Chinese Communist Party, with its Marxist-Leninist and mercantilist vision for the world, versus freedom-loving people everywhere” (O’Brien 2020: 2). Furthermore, whereas relations with China had formerly been understood in intergovernmental terms, the Trump administration and others within the federal government apparatus increasingly embraced what was called a “whole-of-society” approach. In other words, civil society as well as the state had to be mobilized. The Chinese Communist Party (CCP) was, it was said, undermining the United States through universities, soft power organizations such as the Confucius Institutes, research and development, and cyber espionage (Kranz 2018). Furthermore, the CCP was, as both FBI director Christopher Wray and Defense Secretary Jim Mattis asserted, going beyond the state structures and itself organizing a whole-of-society effort. Given this, the Chinese offensive had to be matched with similar efforts by the United States (Rogin 2021a: 111). The radical shift in policy thinking secured endorsements from across the aisle, despite the intensely polarizing character of the Trump presidency (Goldstein 2021: 55). As the Washington Post noted during the early stage of the economic war: “When he threatened last week to impose tariffs on almost all Chinese imports, applause came from Republicans like Sen. Marco Rubio, an occasional Trump critic, as well as prominent Democrats including Senate Minority Leader Charles E. Schumer of New York and Sen. Sherrod Brown of Ohio” (Lynch 2018). Even those most closely identified with overtures toward Beijing seemed to shift. Nonetheless, by the time the Trump presidency was coming to a close, former treasury secretary Paulson argued that the tariffs imposed on Chinese imports should not simply be removed by the incoming administration, but Washington should instead seek a quid pro quo: “The clock will not simply be rewound. . . . We should look to a punitive toolkit built on targeted reciprocity that includes jointly withholding access to our markets” (Fromer 2020). Former secretary of state and national security

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advisor Henry Kissinger, who had paved the way for Nixon’s historic 1972 trip to China, also appeared to accept the legitimacy of the Trump administration’s actions: “It was important for him to emphasize the deep concerns Americans have about the evolution of the world economy that is not balanced. I think that was important to emphasize” (Martin 2020). In sum, as Ely Ratner, who had formerly served as deputy national security advisor to Joe Biden when he was vice president, put it: “There is almost no constituency in the US for business-as-usual with China. . . . Everyone in their own way is saying ‘you have to be tough on China’” (Lynch 2018). Nonetheless, although paradigmatic change is important, the concept of transformational change encompasses more than a “new common sense,” a reconfiguration of goals, and a change in governmental priorities. It also includes the rise of new interests that become aligned with the new priorities and changes to institutional arrangements. These took place, but only partially rather than in a wholesale fashion. Thus, while there was not a reconfiguration of interests whereby new interests displaced established constituencies, there was a significant shift within some of the core constituencies aligned with the United States’ China policy. Once Trump took office, think tanks such as the Heritage Foundation and the Hudson Institute appeared closely aligned to the White House and, while there was a degree of implied disdain for the president’s abrasive unilateralism and impetuosity, there was also a tacit acceptance across much of the knowledge regime that the United States had to take a more assertive position with China on economic and security issues.16 Many free-market conservatives, most notably the late Martin Feldstein, who had served in the Ronald Reagan administration, saw the trade war as a means by which China could be compelled to comply with the rules governing commerce (Feldstein 2019).17 Finally, there were advocacy organizations and think tanks at the edges of the knowledge regime, such as the Center for Security Policy, that sought to drive the policy agenda toward a much more unrestrained embrace of the competition paradigm (Center for Security Policy 2020). Institutional change, another important component of policy “transformation,” has been less pronounced, partly because it is likely, ceteris paribus, to lag behind other forms of change. Policy ideas and the configuration of interests around a policy shift in character. Then, in the wake of this, legislation and policy-implementing institutions are reconfigured to secure and solidify those changed policy ideas and interests. There was institutional change within Washington as the administration struggled to make appointments, positions were not filled, and some moved out of government service. In this context, the locus of policymaking shifted as formal channels were largely circumvented (Ashbee and Hurst 2020: 12–13). In 2018, the Justice Department, then headed by Jeff Sessions, launched the China Initiative to address alleged espionage, cybertheft, and operations intended to secure influence (Nakashima 2022).

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Measures were introduced. The trade war has been well charted. In July 2018, the United States imposed 25 percent duties on around $34 billion of imports from China, and China then retaliated by imposing comparable tariffs. After almost a year and a half of further tariffs on both sides, a “phase-one” trade deal was agreed on at the beginning of 2020. Its provisions included commitments to purchase from the United States financial market access, as well as intellectual property protection and enforcement (Mullen 2021). This was followed by a limited easing of tariffs and other restrictions, but many remained in place. In late 2020, the US customs agency issued “withhold release orders” prohibiting cotton, apparel, hair products, and computer components from four companies based in Xinjiang. This was followed up by a decision to block cotton imports made by the Xinjiang Production and Construction Corps (Mullen 2021). The Biden administration maintained these policies and, if anything, pursued them with greater vigor. It announced in early 2021 that it had no plans to remove the tariffs and then, at the end of 2021, a bill was passed banning imports from Xinjiang and imposing sanctions on officials held responsible for the use of forced labor in the region. As has been noted, FIRRMA expanded the scope of foreign investments subject to national security reviews while the 2018 Export Control Reform Act sought to extend restrictions on the export of emerging and foundational technologies that can potentially be used for military as well as civilian purposes (dual-use technologies) (Congressional Research Service 2020). The Holding Foreign Companies Accountable Act was signed by President Trump in December 2020. It required the Securities and Exchange Commission (SEC) to prohibit the trading of securities of a non-US company if the Public Company Accounting Oversight Board (PCAOB) was not able to conduct a full inspection of the company’s accounts over a three-year period because of legal restraints imposed in another jurisdiction. Chinese companies were the principal target and the act specifically required disclosures about their ties with the Chinese Communist Party (Congress.gov 2020). If international institutions and structures are considered, the reconceptualization of the Asia-Pacific when the Trump administration took office set the stage for shifts. The term Indo-Pacific had occasionally been employed, for example, by Hillary Clinton when she was secretary of state during the Obama years and by the State Department when it later endorsed the Indo-Pacific Economic Corridor (IPEC). It had also been used intermittently in Japan, India, Australia, South Korea, and Taiwan as well as by ASEAN. Nonetheless, the region had generally been described by US administrations prior to 2017 as the “Asia-Pacific” (Stilwell 2020). The Trump administration institutionalized the use of the term Indo-Pacific. The December 2017 National Security Strategy Document referred to the “IndoPacific” eleven times and the “Asia-Pacific” just once (White House 2017).

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What was the significance of this? Mental maps are in themselves a source of power. The Indo-Pacific was said to reconceptualize the position of China by representing its relationship to the Indian Ocean as well as to the Pacific and the connectivity between the two oceans: “It’s about diluting China’s profile, or diluting China’s impact in a larger ocean, in a wider regional context” (Nelson 2017). It also connected with Japan’s efforts to build a “free and open Indo-Pacific” region and acknowledged India’s position as an emergent power. As a senior Trump administration official remarked: “We have strong and growing ties with India. . . . We talk about an Indo-Pacific in part because that phrase captures the importance of India’s rise” (Nelson 2017). The discursive and conceptual shift that took place when the IndoPacific displaced the Asia-Pacific opened the way for institutional shifts or significant protoinstitutional shifts. The Free and Open Indo-Pacific had its first incarnation when Japanese prime minister Shinzo Abe made his “Confluence of the Two Seas” speech before the Indian parliament in 2007 (Pant and Mattoo 2021: 2). In the speech, he envisaged increased connectivity allowing “people, goods, capital, and knowledge to flow freely” across “broader Asia,” the Pacific, the United States, and Australia (Hosoya 2019: 20). The FOIP reappeared during 2017 in both Japan and in speeches by senior figures in the Trump administration, including the president himself. While FOIP, as a phrase, points to and emphasizes freedom of navigation, it also incorporated commitments to infrastructural development, although Japan always stressed that this was not directed against the BRI and emphasized its willingness to cooperate with the initiative. The Quadrilateral Security Dialogue (Quad) between the United States, India, Australia, and Japan developed in tandem. In 2007, amid vehement Chinese opposition, there was a single round of dialogue and joint military drills. Largely moribund since 2008, when Australia withdrew from the arrangement and some of its most committed backers lost office, the Quad reconvened at the initiative of the United States at the November 2017 East Asia Summit and met at ministerial level for the first time at the United Nations in 2019 (Panda 2017). In 2020, Pompeo made clear the Trump administration’s vision for the Quad: “As partners in this Quad, it is more critical now than ever that we collaborate to protect our people and partners from the CCP’s exploitation, corruption and coercion. . . . Once we’ve institutionalized what we’re doing—the four of us together—we can begin to build out a true security framework” (as quoted in Gallo 2020). Pompeo’s rhetoric was, however, something of an outlier. China was indeed an impetus for the resurrection of the Quad. All four countries had concerns about trade, human rights issues, and suspected espionage. There were tensions along the Sino-Indian border, allegations of Chinese interference in Australian politics, and continuing disputes about the status of the

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Diaoyu/Senkaku Islands (Power 2021). Nonetheless, given the ambiguities in the relationships between many Asian nations and China, it was not, despite Pompeo’s words, overtly directed against or toward China. Indeed, the Quad has generally held back from directly referring to China (Power 2021). This is considered further in Chapter 6. There were other policy shifts. The 2021 National Defense Authorization Act (NDAA) was enacted during the final weeks that Trump was in office following a congressional override of a presidential veto. It made a significant commitment of new resources to the Indo-Pacific in the form of the Pacific Deterrence Initiative (PDI), which committed $6.9 billion over three years to regional security and to “deter Chinese malign behaviour” (Gould 2020). Although the Quad may have had limited long-term potential, the ties between the United States and India, which were cemented by Trump’s personal relationship with Indian prime minister Narendra Modi, were strengthened. The India-US Strategic and Commercial Dialogue established by Obama was replaced by a 2+2 dialogue intended to give greater emphasis to national security cooperation (Aryan 2020). Furthermore, in August 2018, India was granted the status of Strategic Trade Authority Tier 1 (STA-1). This permitted sensitive dual-use technology products to be exported to India by US companies, thereby placing it in the same category as Israel and North Atlantic Treaty Organization (NATO) member states. The year 2019 saw the first-ever tri-service bilateral military exercise between the two countries (B. Bowman and Gabel 2019). Furthermore, there was a change in the policy tone and perhaps also the content of policy toward Taiwan, which could be understood as an edging away from One China. The Taiwan Assurance Act, signed by President Trump at the end of 2020, strengthened bilateral ties between Washington and Taipei, backed Taiwan’s participation in the UN and other international organizations, and provided funding for the US-Taiwan Global Cooperation and Training Framework. Following passage of the act in the House of Representatives, the Trump administration approved further arms sales to Taiwan, including antiship cruise missiles and drones (Kutlu and Khaliq 2020).

Summary This chapter has traced US-China relations from the 1990s onward. It suggested that, although there was a stated ambition to ensure that China became a responsible stakeholder and an exponential growth in trade following China’s accession to the WTO, the overall policy regime governing US-China relations was shallowly embedded. Relatively few constituencies were welded to it. It was then subject to negative feedback processes during the George W. Bush and Barack Obama presidencies that weakened it still

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further. The vulnerabilities of the policy regime opened the way for prototransformational policy shifts based on strategic competition once Donald Trump had given up on the possibility of a grand bargain between Washington and Beijing. While there was undoubtedly a change of tone after Trump left the White House, the readiness of the Joe Biden administration to maintain the broad policy framework established under Trump confirms the significance and resilience of the shift that took place during 2017. US policy toward the BRI should be seen within this overall context. In Chapter 3, I consider perceptions of the BRI within this overall context, and I chart the defining features of the critique put forward in the Trump administration, in Congress, and across many of the Washington, DC, think tanks.

Notes 1. Nonetheless, five months ahead of the 2016 election, public attitudes were markedly less hostile toward China than surveys of congressional opinion might suggest. While Democratic identifiers were much more likely to support cooperation with China, 55 percent of Republicans and 49 percent of core Trump supporters believed that the United States should “undertake friendly cooperation and engagement” with China (Smeltz et al. 2016: 31). 2. Senator Bernie Sanders was an exception to the rule. Although far from uncritical of Beijing, he argued the case for cooperation to address global challenges such as climate change, pandemics, nuclear proliferation, and economic inequality (Sanders 2021). 3. Colin Powell, the incoming secretary of state, took a markedly less abrasive stance. He emphasized that China was not an “enemy” and, although there were areas of competition, there also was scope for cooperation (Garrison 2005: 168). 4. Beijing appropriated the concept of a war on terror in its framing of its actions in Xinjiang (Tucker 2013: 42). It should also be noted that the US strategy toward North Korea, particularly after its withdrawal from the Nuclear Non-Proliferation Treaty in 2003 and the six-party talks that then took place, depended heavily on Chinese facilitation and cooperation. 5. Some commentators have argued that the crisis of April 2001, when US and Chinese naval aircraft collided (the Hainan Island incident), led initially to significant tensions but, in the longer run, appeared to highlight the limits to US power and the need for cooperation between the two countries (D. Roy 2003: 80). 6. The crisis, which was widely attributed, at least as a proximate cause, to exuberance in the housing markets and the fragility of securities constructed on the basis of housing loans, also put a substantial question mark against the US growth model and a growing confidence in Beijing and beyond about the resilience of the Chinese model (Freeman 2013: 186; Davis and Wei 2020: 122). 7. There are no clear dividing lines and some of the policy shifts, including a partial redeployment of naval capabilities, associated with the Pivot to Asia dated back to George W. Bush’s second term (Rolf 2021). 8. The decision to begin the negotiations that would lead to the TPP was originally made by the George W. Bush administration in February 2008 (Fergusson and Vaughn 2010: 1).

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9. Barack Obama’s administration renamed the Strategic Economic Dialogue and it became the Strategic and Economic Dialogue. 10. Some have come to the conclusion that the BRI should be seen in terms of economic power projection if only because other lines of explanation appear to have limited validity. The economic gains secured by BRI firms have to be set against losses. Relatively little of the surplus capacity in the Chinese economy has been absorbed by BRI projects (Doshi 2021: 241–242). 11. A paper published by the National Bureau of Economic Research has cast doubt on the assertion that the growth in trade constituted a “shock”: “We cannot reject that politicians could predict the initial China Shock in the early 1990’s, but not around 2000, when China started entering new sectors, and find a moderate role of constituent interests, compared to ideology. Overall, US legislators appear to have had accurate information on the China Shock but did not place substantial weight on its adverse consequences” (Bombardini, Li, and Trebbi 2020). 12. AmCham China is the shorthand title of the American Chamber of Commerce in the People’s Republic of China. 13. While populism, and the energy that the 2016 Trump campaign generated, was largely directed toward, and drew support from, the White working class, the Republican White working-class vote predated Trump’s victory. Indeed, the Republican ticket had won a majority of White working-class votes in every election from 1980 onward except 1992 and 1996 (Carnes and Lupu 2021). 14. Trump also went back on his campaign promise to declare China to be a currency manipulator insofar as it undervalued the renminbi to boost its export trade and restrict imports (Heinlein 2017). 15. There were, nonetheless, clear signs that China was complying with UN sanctions on the Pyongyang regime. During 2017, trade between China and North Korea fell 10.5 percent compared to 2016. In December 2017, overall trade was down 50.6 percent when compared with the same period in 2016 (Tan 2018). 16. In 2021, Secretary of State Mike Pompeo became a distinguished fellow at the Hudson Institute, although it should be noted that Henry Kissinger, who is reportedly seen by China as a “reliable friend and a trusted interlocutor,” is also affiliated (Rogin 2021a: 5–6). 17. There were exceptions. Some attached to the Cato Institute, the free-market think tank, questioned the claim that tariffs would induce structural reform in China and saw “decoupling” as dangerous in that it detached China from the constraints imposed by the logic of economic necessity (Carpenter 2020).

3 US Perceptions of the Belt and Road Initiative

Despite some early doubts within the foreign policy think tanks and among advocacy organizations, Barack Obama’s White House, which was perhaps mindful that its objections to the Asian Infrastructure Investment Bank (AIIB) had left it relatively isolated as European countries raced to join the body, had initially offered muted support for the Belt and Road Initiative (BRI). In September 2015, the White House stated that the United States “welcomes China’s growing contributions to financing development and infrastructure in Asia and beyond” (Wuthnow 2018). This cautious, but broadly positive, response may have been a function of US-China cooperation that was continuing in other policy arenas. It may also have reflected a gap in terms of knowledge and understanding because few within the US government grasped the scale of the project or its implications at that point. An Obama administration official later recalled: “When I think back, we didn’t really talk about the belt and road. . . . There was an initial period where people were trying to figure out what was this thing, and I think some people are still trying to figure that out” (Gan and Delaney 2019). Furthermore, at that time, the Obama administration’s strategic attention was focused on concluding the Trans-Pacific Partnership (TPP) that would, the president argued, not only set US standards for trade across the Asia-Pacific, but also would facilitate economic growth among participant countries. The TPP would thus play a critical part in enabling the United States and its allies, rather than China, to shape the future of the region. Within this context, the full implications of the BRI were missed. In some respects, the concept of trade corridors, with which the BRI was initially identified, was a familiar idea. There had been similar thoughts some years earlier in both Seoul and Washington. Some had speculated, at least during moments of thaw in relations with North Korea, about a South Korean 41

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Iron Silk Road (Rolland 2017: 10). Furthermore, a Silk Road Strategy Act had been introduced in Congress in the latter half of the 1990s, and then again in 2006. There may also have been hopes, while Obama was still in the White House, that even if spearheaded by China, regional infrastructural development could play a part in facilitating growth in the Central Asian countries and facilitating the economic integration of Afghanistan. In 2011, the United States had put forward the New Silk Road initiative “as a means for Afghanistan to integrate further into the region by resuming traditional trading routes and reconstructing significant infrastructure links broken by decades of conflict” (US Department of State 2009–2017). Alongside the construction of trade links across Central and South Asia and Eurasia, the Department of State envisaged the development of structured and regulated energy markets, people-to-people exchanges, and the streamlining of border crossings (US Department of State 2009–2017). Aside from some individual projects, however, little came of the New Silk Road. It was lost along with other nation-building initiatives as the governing Afghan regime crumbled under the weight of its own weaknesses and the prolonged war with the Taliban. During John Kerry’s tenure as secretary of state (2013–2017), there was backing for the Indo-Pacific Economic Corridor (IPEC), which, through its name, represented the Indian and Pacific Oceans as a unified region maritime entity and sought greater connectivity, regional energy linkages, and economic integration, as well as enhanced trade and transportation corridors (Sundararaman 2017; Kliman and Grace 2018: 15). However, the project faced not only cost challenges, but also difficulties arising from the formal and informal barriers between nations (Sundararaman 2021). At about the same time, the Obama administration sought to promote greater economic integration through the US-ASEAN Connectivity Through Trade and Investment Initiative (Kliman and Grace 2018: 15). As shown in Chapter 2, the Donald Trump administration’s policy toward China seemed undefined and uncertain during much of 2017. Within this context, a US delegation was sent to the first Belt and Road Forum convened in Beijing in mid-May 2017. Matthew Pottinger, the senior White House official for Asia who led it, announced that US firms were “ready to participate in belt and road projects” and had “much to offer.” He cited what he described as their “long and successful track record in global infrastructure development” (Gan and Delaney 2019).1

Turning Against the BRI The move against the BRI formed part of the overall turn to strategic competition with China that emerged during the second half of 2017 (see Chap-

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ter 2). Within this context, the BRI was no longer understood as a public goods project that could bolster regional development, but instead as an instrument of Chinese statecraft and China’s efforts to pursue a mercantilist economic strategy (Joshi 2021: 131). The BRI’s incorporation within the Chinese constitution and integration within Xi Jinping’s legacy and thought appeared to confirm that was indeed a form of national aggrandizement. In October 2017, Secretary of Defense James Mattis told a Senate committee hearing: “In a globalised world, there are many belts and many roads. . . . And no one nation should put itself into a position of dictating ‘one belt, one road.’”2 This was followed up by Secretary of State Rex Tillerson, who asserted in a claim that was to become a staple feature of US policy statements that BRI projects failed to provide local employment and saddled poorer nations with vast debts (Gan and Delaney 2019). The head of the US Pacific Command also caught the shifting mood. The BRI was, he asserted, “a concerted, strategic endeavor by China to gain a foothold and displace the United States and our allies and partners in the region” (J. M. Smith 2018a: 220). President Trump himself addressed the BRI within the context of broader Chinese ambitions at an Asia-Pacific Economic Cooperation (APEC) summit held in Vietnam in early November 2017 after his visit to China. In an address, he paid tribute to China’s economic achievements, but he also used the opportunity to establish the Indo-Pacific as the core frame of reference for the administration, lambast Chinese trade practices, and in a reference to the BRI, commit the United States to providing “strong alternatives to statedirected initiatives that come with many strings attached.” He pledged that the United States would reform its development finance institutions “so that they better incentivize private sector investment” (Reuters 2017b). By the end of 2017, the administration’s policy stance had the beginnings of a defined trajectory, although concerns about the BRI were generally subsumed within a broader critique of Chinese ambitions. Insofar as the BRI was considered directly, it was regarded as a Chinese project to create a new global economic architecture, alongside the foundation of the AIIB, and tied to the country’s geostrategic moves in the East and South China seas. Alongside this there was a growing realization, at least within the Washington think tanks, that the BRI’s potential reach extended beyond the Indo-Pacific to, for example, the Middle East (Chaziza 2021). In sum, as the December 2017 National Security Strategy put it, China’s “infrastructure investments and trade strategies reinforce its geopolitical aspirations” (White House 2017: 46). While there were repeated claims in Washington that there would be a “whole-of-government” approach in response to China, it was Vice President Mike Pence who emerged as the Trump administration’s point man on the BRI. He not only attacked the initiative but also, as Trump had done in

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his address to APEC, alluded to a US policy alternative by promising a mutual rather than a one-sided partnership with nations that might be considering BRI projects: “We don’t drown our partners in a sea of debt. . . . We don’t coerce or compromise your independence. We do not offer a constricting belt or a one-way road. When you partner with us, we partner with you, and we all prosper” (Tarabay and Sang-Hun 2018). The character of the partnership that Pence promised and US efforts to develop policy alternatives to “contain” the BRI took shape incrementally and had a limited, patchwork form. Each is considered in subsequent chapters of this book. They included a commitment to establish multilateral regional infrastructural projects with, for example, the Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act), Prosper Africa, the Blue Dot Network, and other “connectivity” initiatives such as the reinvigoration of the Free and Open Indo-Pacific (FOIP), a Japanese concept originally understood, by Japan and the United States, in terms of maritime security. FOIP was, however, increasingly represented in broader soft power terms that encompassed infrastructural development.

Criticisms of the BRI While figures such as Pence tended to repeat the same few criticisms in describing the BRI, a more comprehensive critique took shape across parts of the US “knowledge regime” from 2018 onward. The term knowledge regime requires elaboration. It refers to the “sets of actors, organizations, and institutions that produce and disseminate policy ideas” (Campbell and Pedersen 2011: 167). Some refer to policy communities. Although there is research work and policy development within the state apparatus, independent and quasi-independent think tanks, as well as other scholarly and research organizations, also play a pivotal role in such regimes as their activities are structured around the generation and transmission of policy ideas. For the most part, it was generally the think tanks aligned with the conservative right, as well as those that addressed foreign policy questions, that focused on the BRI. Although there is market competition between think tanks, each think tank and research foundation also has a distinct identity based in many instances on political affinities and their associations with particular areas of research (Campbell and Pedersen 2011: 167). Nonetheless, certain clusters of ideas can cascade through those think tanks and organizations that collectively constitute the knowledge regime. The critique of the BRI, as it cascaded across the knowledge regime in Washington as well as the executive and legislative branches of government, was structured around eight principal elements. These elements overlap, but some abrade against others or are in competition.

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Grand Strategy and Leverage The BRI was increasingly understood in terms of a Chinese grand strategy as it rested on national “rejuvenation” through the mobilization of China’s state resources and increased regional and global assertiveness. As such, the BRI has been compared with other gargantuan infrastructure projects such as the Berlin to Baghdad railway that contributed to processes of imperial development and the expansion of trade during the late nineteenth and early twentieth centuries (Doshi 2021: 236). From this perspective, the old adage that “trade follows the flag” has been inverted so that the Chinese flag follows patterns of trade (Patey, 2021: 54).3 Certainly, the BRI has provided China with what Rush Doshi has termed relational leverage. Across the region there is growing and asymmetrical trade dependence on China, as well as indebtedness to Chinese financial institutions. BRI projects have also added to China’s growing structural power, as the construction and control over ports created artificial chokepoints that could impede or block shipping and trade (Doshi 2021: 243–246). In sum, the BRI is “meant to serve the broader regional ambition of building a Sinocentric Eurasian order. It reflects Beijing’s newfound willingness to play a leading role in reshaping the world, starting with its extended periphery” (Rolland 2017: 3). The claim that the BRI formed part of a grand strategy aimed at national aggrandizement was made in its most strident form within the knowledge regime by conservative think tanks and advocacy organizations. The Heritage Foundation was founded in 1973 and quickly established itself as one of the principal conservative and Republican-aligned think tanks. It has had close associations with successive Republican administrations, including the Trump White House. The Foundation’s researchers represented the BRI in terms of Chinese “sharp power.” Beijing was, a Heritage report asserted, “using its economic influence as an extension of its foreign policy to punish, coerce, or incentivize regional states to align with its agenda” (J. M. Smith 2018b). The Hudson Institute has often drawn on the experience of Henry Kissinger, architect of President Richard Nixon’s 1972 trip to China, who was also broadly supportive of the Trump administration and even provided former secretary of state Mike Pompeo with a position once he left the federal government. The institute also saw the BRI in terms of Chinese aggrandizement as akin to an “imperial tributary system that placed China at the center of world power.” From this perspective, the BRI “enables the regime to unify China’s disparate economic and foreign policy activities under one harmonious slogan that resonates with the public” (Cronin 2021). Other organizations on the edges of the knowledge regime have played a part in shifting conservative and Republican thinking toward the “containment” of China. The Center for Security Policy (CSP) has backed much

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of the Trump agenda and has taken a strong stand against radical Islam, triggering accusations of Islamophobia and fostering conspiracy theories. Frank Gaffney of the CSP joined forces with Steve Bannon, who served as chief strategist in the White House during 2017, to establish the Committee on the Present Danger: China, a name designed to foster Cold War imagery. The committee has periodically reproduced material from the Epoch Times, which is said to have ties to the Falun Gong. Both the committee and the CSP have emphasized what they depict as the BRI’s strategic and military capabilities and its role in Chinese processes of power projection: “The socalled Belt and Road Initiative (BRI) plays a prominent role in the CCP’s effort to gain economic, political (and military) dominance. . . . To that end, many of the BRI projects—ports and airfields, for example—have a ‘dualuse’ aspect. They work just as well for commercial purposes as for military purposes” (Newsham 2021).4 Furthermore, as Bannon’s resurrection of the name “Committee on the Present Danger: China” suggests, there were also suggestions in some of these accounts that China’s ambitions were driven not only by great-power competition, but were also inspired by goals that had been bequeathed from Marxism and its Maoist tributaries. From this perspective, and although it had become an economic hegemon, China was in some senses little changed from the day that the People’s Republic had been declared in 1949. Xi Jinping’s China was itself a “Leninist imperium” (Blumenthal 2020: 3). According to Dan Blumenthal of the American Enterprise Institute, another influential conservative think tank, China was seeking to export the “Beijing model” of state-led economic development and authoritarian political control (2020: 6). Understandings of the BRI were not, however, monolithic. There were differences and tensions within the thinking of those who represented the BRI and Chinese foreign policy in terms of expansionism. For some its defining purpose was power maximization and a form of neocolonialism, while others saw the BRI more in terms of defensive expansionism. Seen in this way, China was “marching westward” through the BRI to consolidate its strategic position as a regional power and also because it was being increasingly cornered in terms of its eastward ambitions in the East and South China Seas by the United States and its allies, particularly once the Pivot to Asia was proclaimed (Doshi 2021: 235; Rolland 2017: 94).

Debt and Economic Instability Many of the accounts that depict the BRI through the prism of Chinese grand strategy and great-power rivalry also point to the use of funding for projects, and the provision of loans by Chinese financial institutions, as a

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way by which China has secured a hold over other nations in Asia, Africa, Europe, South America, and Australasia. The initiative has also, as Western commentators have noted, brought China into closer alignment with Russia, which has been among the top beneficiaries of BRI spending. A 2022 estimate suggested that China’s cumulative BRI funding on projects in Russia amounted to $932 billion (White 2022). The ties between China and BRI recipient countries have been locked in by the trading agreements that have been concluded alongside development projects. In 2018, for example, China promised to buy $2 trillion worth of imports from BRI countries by 2022. Three-quarters of this trade was to be with countries in Asia and Africa (Standard Chartered 2018). BRI projects were generally tied to loans extended by lenders such as the China Development Bank (CDB) and the Export-Import Bank of China (China EXIM). In some instances, the interest payments, much of which come with relatively high interest rates let alone repayments of the capital, were to prove unsustainable. Furthermore, BRI loans do not adhere to Club de Paris principles, which stress the importance of linking loans to restructuring and reform in line with International Monetary Fund (IMF) requirements (Club de Paris 2022). The potential implications of taking on BRI loans became fully evident in Sri Lanka, where the government had committed itself to infrastructural projects after the conclusion of the civil war in 2009. Chinese institutions offered investment on close-to-commercial terms without conditionality (which would have tied the loan to demands for economic and political reform) or requirements for accountability that the West or Japan would almost certainly have required. According to a Chatham House study, the cumulative value of Chinese infrastructure investment to Sri Lanka amounted to $12.1 billion between 2006 and July 2019 (Wignaraja et al. 2020: 3). Chinese investment had a broad scope encompassing transportation (including Mattala International Airport), the energy and extractive sectors, water and sanitation, urban development, and communications (Wignaraja et al. 2020: 5). The construction of Hambantota International Port, a $1.1 billion project around what had once been a small fishing village on Sri Lanka’s southern coast by the China Harbor Engineering Company, one of Beijing’s largest state-owned enterprises, took place within this context. It was to form a key element, along with Gwadar in Pakistan and Chittagong in Bangladesh, in the development of connectivity across the region. It formally opened in November 2010. Nonetheless, while close to one of the world’s busiest shipping lanes, Hambantota drew in just thirty-four ships during 2012 (Abi-Habib 2018). Even more importantly, the Sri Lankan government faced increasing challenges in making payments on the debt. Following long negotiations with Chinese firms, the government handed

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over the port and 15,000 acres of surrounding land on a ninety-nine-year lease. It was reported that Chinese officials were not prepared to consider an easing of the payment terms, but instead concentrated on securing equity in the port (Abi-Habib 2018). As a commentary in the New York Times noted, “The transfer gave China control of territory just a few hundred miles off the shores of a rival, India, and a strategic foothold along a critical commercial and military waterway” (Abi-Habib 2018). The fate of the Hambantota port has been widely cited particularly in United States and European commentaries because it seems to exemplify the “debt traps” and “debt diplomacy,” as well as the potential threats to the national sovereignty of debtor countries on which, it is said, the BRI rests (Wignaraja et al. 2020: 3). China was, the argument suggested, trapping poorer nations by extending loans and then, when those nations found themselves unable to make repayments, demanded critical infrastructure with strategic potential.5 The Center for Global Development concluded that of the sixty-eight BRI countries at that point, twenty-three were at risk of default (Patey 2021: 122–123). BRI contracts can be attractive for those countries considering infrastructure projects because they are generally processed quickly through centralized and coordinated systems so that transaction costs are relatively low (Lew et al. 2021: 15). Nonetheless, critics suggest that recipient countries are burdened by clauses incorporated within many of the contracts governing BRI. These prohibit disclosure of the terms, thereby preventing those countries seeking external assistance in efforts to secure a later renegotiation. Furthermore, the contracts generally made Chinese backers the first creditors in line if projects faced difficulty. Countries and sectors thus became politically and economically dependent on Beijing, giving China decisive forms of leverage. As Kay C. James of the Heritage Foundation (2018) asserted: “There is a real possibility that some of these nations will have to surrender some of their sovereignty to Beijing to settle those debts. It has already happened in Sri Lanka.” A working paper considering the financial arrangements for a hundred overseas Chinese projects concluded that “cancellation, acceleration, and stabilization clauses in Chinese contracts potentially allow the lenders to influence debtors’ domestic and foreign policies” (Tagliapietra 2021). And a Council on Foreign Relations report emphasized the ways in which China’s acquisition of the Hambantota port fitted the earlier string of pearls hypothesis that saw Beijing engaging in power projection across the Indian Ocean to Africa (Lew et al. 2021: 37). Strategic and military considerations aside, the burden of debts to Chinese enterprises and the boondoggle character of many infrastructural projects, it was argued, was likely to fuel macroeconomic instability in recipient countries. Apart from Sri Lanka, projects in Djibouti, Kyrgyzstan, Laos, Maldives,

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Mongolia, Montenegro, Pakistan, and Tajikistan were also cited as examples of this (Tagliapietra 2021). Laos was liable for $1.78 billion (constituting 12 percent of its gross domestic product [GDP]) toward the cost of the Kunming to Vientiane railway between China and Laos, a figure of such a magnitude that it is almost certain to have wider macroeconomic effects (T. Ng 2019). The macroeconomic and fiscal strains generated by Covid-19 from early 2020 onward put an even bigger question mark against the viability of some BRI projects. Many recipient countries were already economically fragile and the loss of revenue during the pandemic, as well as the difficulties that Chinese personnel have faced in traveling in and out of the country as it has pursued a dynamic zero-Covid policy, may yet prove to be a tipping point.6

Contested Multilateralism There have been other charges against the BRI and Chinese policy more broadly. There were, as has been noted in Chapter 2, hopes expressed with the greatest clarity by Deputy Secretary of State Robert Zoellick in 2005 that China could become a responsible stakeholder in the established global order. That term suggested participation, and integration, within the institutional framework that defined that order. Nonetheless, as some realist accounts have argued, a rising power is almost certain to challenge an established hegemon, and the rules and structures that it has put in place, because its interests will be different. In such settings, multilateralism is contested. States and other actors might begin by seeking leverage within existing structures to change policy (“regime shifting”) or, if this fails to secure the goals that they seek, they might employ the threat, or the creation, of alternative international institutions (“competitive regime creation”) (Morse and Keohane 2014: 386). Through the BRI, some Western critics have charged, Beijing has been seeking to undermine the existing architecture governing global finance and trade that had governed much of the world from 1945 onward and tilt the institutions of governance toward Chinese interests. China has, for example, made efforts to create alternatives to SWIFT, the interbank payment network, and establish its own credit ratings agencies (Doshi 2021: 246). The BRI is, from this perspective, a means of shifting the architecture of global governance toward Beijing’s interests or supplanting it (Cronin 2021). BRI funding thus constitutes an inherent challenge to the World Bank (Kynge et al. 2022). The postwar Marshall Plan (with which, as noted, the BRI has sometimes been compared) led to the creation of the Organisation for Economic Co-operation and Development (OECD). The biennial Belt and Road Forums for International Cooperation, which bring together delegates representing more than 130 countries and “pay homage

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to China’s narrative of benevolence,” may well begin, it was argued, to take on an enduring and resilient institutional form (Cronin 2021). Nonetheless, although these charges are put forward in forceful terms, there is a degree of ambiguity and uncertainty in the character of the contestation around multilateral institutions that is taking place. Chinese intentions are unclear. While projects such as the BRI and the AIIB can be understood as new forms of international architecture, this does not necessarily mean that China has abandoned the postwar order. There are certainly limits on the extent to which the country can be integrated within existing institutional structures because so many firms and markets are closely tied to the Chinese state and the directive role that the party-state plays in macroeconomic management. While, for example, China has sought recognition for the renminbi as a global currency, it also remains fearful of full convertibility insofar as that would jeopardize its capacity to control monetary policy. Even an alternative Chinese-led architecture, if one develops much more fully, might limit China’s capacity to place domestic policy considerations first and foremost. Nonetheless, China gains much from the stability, scope, and resilience of the existing global architecture, and it would lose much if it was significantly weakened or undermined. Furthermore, some established bodies, such as the IMF, have made extensive efforts to integrate China and, in October 2016, added the renminbi to its “special drawing rights” basket (Rolland 2017: 105).

Transparency, Corruption, and Governance As noted above, the fate of Sri Lanka, in particular Hambantota International Port, is routinely invoked by those critical of the BRI. Aside from claims that the initiative is saddling developing countries with unsustainable levels of debt while taking strategically important assets as collateral, it was also asserted that the BRI fostered a culture of corruption. Many recipient countries are characterized by institutional weakness and instability that has allowed corrupt practices to become widespread and routinized (Magnus 2018: 182). Such corruption arose either through private deals with government or private sector actors that offered few returns for others, or through efforts to ensure that policymakers gave their backing to particular BRI projects. During the 2015 Sri Lankan elections, it was charged, substantial Chinese funding was channeled to aides and to the organization of activities in support of the candidate most actively supporting Chinese policy and Beijing’s efforts to tilt influence away from India (Abi-Habib 2018). Sri Lanka is far from being an isolated example. There have been repeated charges of cronyism across recipient countries. BRI projects, it is said, have reinforced and bolstered established hierarchies and, at the same

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time, impeded efforts to construct more broad-based forms of governance. In some cases, the consequences of projects have gone beyond corruption. In Kenya, in the absence of transparency and accountability, local Kenyan partners reportedly gave jobs and offered contracts on the basis of tribal and ethnic affiliations, thereby fueling polarization processes and division (Lew et al. 2021: 49).

Locking In Standards, Products, and Markets A further argument was put forward by those critical of the BRI. The initiative is said to be a means of giving Chinese firms, which in many cases are subsidized by the Chinese state, privileged access to overseas markets. For the most part, at least until the advent of the Covid-19 pandemic in 2020, BRI projects provided relatively few employment opportunities for local labor and instead brought in Chinese workers. Certainly, those in management positions were drawn from China and there was only limited skills transfer. In sum, BRI recipient countries found themselves increasingly locked into Chinese ecosystems, making it much more difficult for firms from other nations to secure a foothold in their markets at a later stage. The “export” of Chinese engineering standards through, for example, highspeed rail has been widely cited (Doshi 2021: 244). At this point, the concept of path dependence and lock-in effects is directly relevant. First movers secure a significant advantage because their actions shape the character of the path or framework that takes shape so that the adoption of alternative paths or frameworks becomes excessively costly. The BRI’s global footprint (in particular, its high-tech connectivity infrastructure) is largely based on Chinese technology and product standards. Manufacturers and suppliers are thereby bound within the frameworks that have become established and the institutional complementarities that have emerged. This locks in China’s relationship with other countries, particularly those in Asia (Doshi 2021: 244; Magnus 2018: 181).

Environmental Degradation and Negative Externalities The charge sheet against the BRI extends to performance and standards. Many non-Chinese accounts have sought to draw a contrast between BRI projects and the quality infrastructure provided by, for example, Japan. This form of framing and the term quality are, of course, intended to convey much but, in this context, they encompass governance structures, transparency, financial viability, proven economic need, and also assurances that recognize environmental standards will be honored: “Chinese investment

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has nearly become a euphemism for wasteful spending, environmental destruction and untenable debt. Many major projects are currently strewn around the world in half-finished disrepair and the opportunities that were sold to local populations rarely materialized. All up and down the Belt and Road, projects have been marred by delays, financial implosions and (occasionally violent) outpourings of negative public sentiment” (Shepard 2020). Aside from the overall cost, which was noted above, the construction of the railway between China and Laos under the auspices of the BRI also represented, it has been charged, a failure in quality terms. Reports suggest that there had been a systematic lack of adequate preproject viability analysis, which had also led to the eviction of villagers (T. Ng 2019). The BRI was thereby undercutting attempts by lending bodies in the West and Japan to insist on rigorous planning procedures, as well as full assessments of the social impact of projects and institutionalized procedures to minimize corrupt practices. The BRI is also charged with a reckless neglect of environmental considerations. It has, for example, promoted coal-fired power projects. According to one 2015 estimate, coal accounted for 46 percent of China’s BRI energy investments, thereby locking countries into a high-carbon infrastructure (A. Ng 2021). Having said this, the negative feedback that this form of development has received, as well as the decisions by countries such as Japan and South Korea to stop funding overseas coal power projects and China’s own commitment to become carbon neutral by 2060, appears to have contributed to a significant reappraisal in Beijing. There was no investment in new coal plants during the first half of 2021 (A. Ng 2021). Nonetheless, it is noteworthy that some continuing BRI projects, including those with the greatest symbolic value for “connectivity,” had significant environmental implications. The seventeen-day freight train trip between Yiwu and London initiated at the beginning of 2017 was speedier than shipping, but nonetheless created much more of a carbon footprint (Magnus 2018: 174).

Moving Upward While the word initiative seemed to convey a degree of modesty, particularly when compared with the seeming grandiosity of One Belt One Road, the BRI grew both horizontally and vertically. Its geographical ambitions extended far beyond Eurasia. At the same time, it increasingly went far beyond conventional understandings of “infrastructure,” as it spawned a range of allied initiatives, all of which indicated a much higher level of strategic ambition. These included the Space Silk Road based on advanced satellite capabilities, the Digital Belt and Road that not only appeared likely

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to lock recipient countries into Chinese ecosystems but also to have surveillance and censorship capacities, and the Polar Silk Road that held out the promise of new transcontinental shipping routes. In the wake of criticisms that the BRI contributed to environmental degradation, as well as China’s growing domestic focus on emissions and climate change, the green Silk Road was added to the list (CMS 2020: 40; Cronin 2021).7 It was, however, the BRI’s shift toward digital capacities and new technology that provoked particular consternation in the United States and among its allies. Commercial fears merged with national security issues. Undersea cables, which carry more than 95 percent of international data, were open to intelligence-gathering. China became the world’s fourth major provider of these systems (Reconnecting Asia 2021). At times, however, these concerns were framed in terms of human rights and freedoms rather than security. Some new technology packages included capabilities allowing the digital surveillance of citizens. One estimate suggested that 44.1 percent of BRI participant countries, in particular those governed by nonliberal regimes, had acquired artificial intelligence surveillance technology from Chinese companies (Lew et al. 2021: 44).

Natural Resources Some accounts of the BRI have stressed China’s search to secure energy supplies in ways that are reminiscent of the early studies of great-power imperialism. Vladimir Lenin’s 1916 pamphlet, Imperialism: The Highest Stage of Capitalism, attributed the scramble to establish African colonies by many of the advanced capitalist countries in the late nineteenth century to the struggle by monopolies to secure raw materials (Chinese Economic Studies 1975: 81). In that spirit, the Central Asian countries lying along the Silk Road Economic Belt, including Kazakhstan, Uzbekistan, Turkmenistan, and Azerbaijan, have been described as the “21st century strategic energy and resource base” (Rolland 2017: 113). At the same time, the BRI was directed toward reducing the challenges posed by maritime chokepoints in the Indian and Pacific Oceans to ensure the free flow of oil, minerals, and food. The land corridors in South and Southeast Asia and the construction of pipelines, railways, and highways appear to hold out the promise of doing just this (Patey 2021: 120).

Counterclaims and Contestation In sum, most US and other Western commentaries assert that Beijing is securing considerable geopolitical leverage through the BRI as countries

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become increasingly dependent on Chinese finance and trade. Whereas Beijing often talks of the BRI in terms of “win-win cooperation” and the construction of a “community of common destiny,” many Western accounts portray it as zero-sum competition based on Chinese expansionism and the building of a sphere of influence across not only Eurasia but, in the longer term, much of the globe. Many of the most frequent charges against the BRI are, of course, open to challenge. For example, although the Council on Foreign Relations is often critical of the BRI, a 2021 report rebutted assertions that the BRI had been constructed as a debt trap. The Hambantota International Port project, it is said, is so widely cited because there are so few examples of Chinese state-owned enterprises seizing physical assets in this way. Sri Lanka faced an exceptional combination of circumstances that included high levels of debt, balance-of-payments difficulties, a natural disaster, a civil war, and a government policy decision to privatize state assets (Lew et al. 2021: 28). It has also been argued that instead of engaging in debt diplomacy, China has simply adopted a markedly different approach to lending to that pursued by Western financial institutions. Chinese loans have a more “patient,” long-term character and Beijing is open to the use of capital to open up markets or develop strategically significant sectors. There has also been a process of policy learning by China as successive countries have faced difficulties making loan repayments (Kaplan 2021: 335–336). Furthermore, countries engaging with the BRI or other forms of Chinese investment should not be represented, as they are implicitly in some US-based accounts, in terms of passive victimhood. To put it graphically, it is important that they are not robbed of agency. Some have resisted the BRI. This partly has been because many proposed projects, including those put forward by the United Nations, the European Union (EU), and the Asian Development Bank, have been transregional in character. Thereby, they challenge the resilience of borders and raise questions of sovereignty. Given this, there has been a “reluctance to fully embrace the openness and liberalization” represented by the BRI, but also by Japan and the West (Rolland 2017: 41). Most notably, India has kept its distance from the BRI. This reflects the generally frayed character of bilateral relations in overall terms and Beijing’s close cooperation with Islamabad through the China-Pakistan Economic Corridor (CPEC). CPEC stretches from Kashgar to Gwadar Port, thereby bringing together the overland Silk Road Economic Belt and the Twenty-first Century Maritime Silk Road. Nonetheless, it crosses the disputed regions of Pakistan-occupied Kashmir and, therefore, from New Delhi’s point of view, infringes Indian sovereignty (Medcalf 2020: 189; Sachdeva 2018). Furthermore, insofar as politics as well as economics rest on the concept of opportunity cost, there is a sense in India that it can probably play more of a role in shaping regional infrastructure development

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through initiatives such as the Blue Dot Network and the Quad (Sundararaman 2021). Furthermore, contracts and contractual obligations are not always a one-way process. There have been processes of renegotiation that have, from the recipient country’s point of view, proved successful. In some cases, incoming governments have pulled back from the commitments entered into by their predecessors. In 2019, Malaysia successfully renegotiated the contractual arrangements for the East Coast Railway Link leading to a reduction in the overall price for the project and an increased role for Malaysian firms (Patey 2021: 109–110). It may also be that the capacities and potential of the BRI have been exaggerated by both Chinese propagandists and Beijing’s Western critics. Most Chinese foreign direct investment takes place in non-BRI countries (Magnus 2018: 177). The BRI’s reach is held back by its own structural weaknesses. George Magnus has argued that the initiative’s defining characteristics are based on “ineptitude, inefficiency and poor governance” (Magnus 2018: xiii). The BRI has “exported” the fragmented governance structures that characterize Chinese domestic politics so that there are competing agencies acting on behalf of ministries, the provinces, policy banks, state-owned enterprises, and private firms (Patey 2021: 118). While much was made of the many Memorandums of Understanding (MoUs) that were signed with different countries across the globe, they were often couched in loose and imprecise terms and had relatively few specific policy commitments (Medcalf 2020: 190). Often, apart from the chagrin of Washington, a MoU brings few costs or requirements with it (Patey 2021: 116). Furthermore, although studies of the BRI have often cited gargantuan sums of money, some accounts suggest that the funding behind it may amount to hundreds of billions rather than trillions of dollars (Goodman 2021). In sum, seen in this way, the BRI is arguably more a matter of political symbolism than hard infrastructural reality (Magnus 2018: 175). Furthermore, although studies of institutional development generally focus on positive forms of feedback as an institution or policy regime establishes itself and becomes more solidified, there are also instances of negative policy feedback. This term refers to policy effects “that tend to undermine rather than reinforce the political, fiscal or social sustainability of a particular set of policies . . . they are often extremely important, especially in explaining major shifts in policy regimes that are often explained in terms of exogenous shocks but actually are deeply rooted in existing policies” (K. Weaver 2010: 137–138). Certainly, the BRI appeared to generate, or seemed set to generate, negative feedback effects. Some projects, as has been noted above, created significant friction with recipient countries (Magnus 2018: 184). There have been scandals, with claims that BRI projects gave rise to illicit dealings and corruption, in Kenya, Sri Lanka, and Malaysia (Patey 2021: 126). China has proved alert to the dangers of reputational damage if

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BRI projects become mired in corruption, or prove financially or environmentally unsustainable. Indeed, in his statements Xi has announced that the BRI not only is seeking to move far beyond hard infrastructure, but also will be redirected to stress the importance of the green transition (Song 2021). In sum, the critique put forward by some Western commentators should be qualified. Some BRI projects have played an important role in economic and social development. The 750-kilometer railway line between Addis Ababa and Djibouti cut the journey time from three days to twelve hours. The roads and pipelines constructed in Central and Southeast Asia have driven growth (Kynge et al. 2022). Nonetheless, notwithstanding these examples, many of the criticisms outlined in this chapter have had a wide resonance in North America, Europe, parts of Asia, and, to some degree, in Africa. There was a drop in BRI funding from 2016 to 2017 onward and also evidence of a pullback around the time of the Covid-19 pandemic. This, together with the resonance of the anti-BRI critique, opened up a degree of space for the United States and other Group of 7 (G7) countries as well as the EU to offer competing policy alternatives (Goodman 2021). Subsequent chapters look at these alternatives in detail.

“Principled Realism” The Trump administration had come to office under the banner of “America First” and “principled realism.” There was a commitment to increasing military capacities, the use of hard power, and a disdain for the nation-building exercises that had been undertaken by preceding administrations in Kosovo, Afghanistan, and Iraq. America First was structured around an impatience with the multilateral institutions that defined the postwar order and a blunt refusal to continue supplying global public goods through overseas US bases, alliances, and the nuclear shield or, at the very least, a fundamental reconfiguration of the terms under which they were provided. In sum, there was a conscious repudiation of the policy legacies bequeathed by preceding administrations (whether Republican or Democratic), the liberal international order, and neoconservative efforts to “export” individualist, democratic, and market-based values across the globe. There was, of course, a need for forceful demonstrations of hard power as a response to terrorism or the threats posed by adversaries, but the prolonged wars in Afghanistan and Iraq were both regarded as failures (Anton 2019; Ettinger 2020). Much of this thinking found its way into the Trump administration’s policy during its first few months and continued to inform certain policy arenas. Trump’s open hostility to free trade and multilateralism allowed President Xi to pick up the mantle of both and claim to be their champion (Kaplan 2021: 334). The first budget (Fiscal Year 2018) that the incoming

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administration presented to Congress (America First: A Budget Blueprint to Make America Great Again) sought to increase defense spending dramatically (in a reflection of the White House’s commitment to hard power) while at the same time restricting foreign aid and external assistance to regions, programs, and international organizations that “do not substantially advance U.S. foreign policy interests” (Office of Management and Budget 2017: 33). The rationale for this was that the United States had borne a disproportionate burden when compared with other developed countries’ foreign aid provision. Alongside this, there appeared to be limited political confidence in the US State Department and agencies such as the US Agency for International Development (on which it sought to impose funding cuts) that long had been associated with the deployment of soft rather than hard power. It was argued that they had been wasteful, profligate, and ineffective, and tied to the deep state. The proposed budget thus included the abolition of government agencies, including the US African Development Foundation, the US Trade and Development Agency, the Overseas Private Investment Corporation, and the United States Institute of Peace (European Parliament Think Tank 2017: 2–4). Principled realism underpinned much of the National Security Strategy published by the administration at the end of 2017. There was a reaffirmation that hard power capabilities were pivotal: “The United States must retain overmatch—the combination of capabilities in sufficient scale to prevent enemy success” (White House 2017: 28). Although the strategy almost certainly owed little to the president himself but was instead drafted by midlevel and junior officials, it nonetheless reproduced Trump’s campaign themes by striking a blow at preceding administrations, charging them with insouciance, and bringing military security together with economic security: As we took our political, economic, and military advantages for granted, other actors steadily implemented their long-term plans to challenge America and to advance agendas opposed to the United States, our allies, and our partners. We stood by while countries exploited the international institutions we helped to build. They subsidized their industries, forced technology transfers, and distorted markets. These and other actions challenged America’s economic security. (White House 2017: 2)

The National Security Strategy also embraced a much more overt form of confrontation and competition with China and, within this context, the BRI. China was deemed to be a revisionist power, in that it was attempting to reconfigure the established global order and challenge the rules around which that order was structured (White House 2017: 25). The strategy’s conclusion followed on from this: “China seeks to displace the United States in the Indo-Pacific region, expand the reaches of its state-driven economic model, and reorder the region in its favor” (White House 2017: 25).

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The report also noted that the BRI, together with particular trade practices, was enabling China to secure a “strategic foothold” in Europe (White House 2017: 47). Alongside these statements, there was a straightforward and unqualified assertion (and an implied distancing from earlier administrations) that former US hopes of China’s integration into the global order had not been realized: “Contrary to our hopes, China expanded its power at the expense of the sovereignty of others” (White House 2017: 25). Nonetheless, at the same time, ideas competed with each other, and the strategy pulled back from a straightforward rendition of principled realism. Alongside the Trump doctrine, it invoked notions of soft power and affirmed the case for cooperation with allies and partners. Indeed, despite all of Trump’s personal instincts, there was a neoconservative edge to some sections of the document. It sought to counter China’s power by championing “American values.” The strategy asserted: “America’s liberties are inspirational, and the United States will always stand with those who seek freedom. We will remain a beacon of liberty and opportunity around the world” (White House 2017: 41). On this basis, the strategy emphasized the role of diplomacy and the importance of diplomats: “We must upgrade our diplomatic capabilities to compete in the current environment and to embrace a competitive mind-set. Effective diplomacy requires the efficient use of limited resources, a professional diplomatic corps, modern and safe facilities, and secure methods to communicate and engage with local populations” (White House 2017: 33). Furthermore, notwithstanding the president’s episodic statements and tweets that had appeared to place US commitments to its allies and partners in doubt, the document also reiterated the US backing for the North Atlantic Treaty Organization (NATO) and the principle of collective security (White House 2017: 48). Despite all of the president’s assertions repudiating the role the United States had played since World War II, the strategy celebrated the immeasurable value of the postwar liberal international order (White House 2017: 2). Within the context of regional security and the challenge posed by China, there was also a pledge to cooperate closely with allies and partners in developing alternative forms of infrastructural provision to the BRI: “We will work with partners to build a network of states dedicated to free markets and protected from forces that would subvert their sovereignty. We will strengthen cooperation with allies on high-quality infrastructure” (White House 2017: 47).

Multilateralism Subsequent strategy reports maintained the administration’s retreat from the president’s frequent assertions suggesting that only hard power mattered. Security required hard power, but also soft power efforts, institution building,

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and economic development. As the 2019 Indo-Pacific Strategy Report published by the Department of Defense emphasized, the US “vision for a free and open Indo-Pacific recognizes the linkages between economics, governance, and security that are part of the competitive landscape throughout the region, and that economic security is national security. In order to achieve this vision, we will uphold the rule of law, encourage resilience in civil society, and promote transparent governance” (US Department of Defense 2019: 4). Alongside this, although there were always statements reiterating that US allies were expected to contribute their full capabilities, there was an emphasis on the value of alliances. According to Secretary of Defense Mattis, “Our strength as a nation is inextricably linked to the strength of our unique and comprehensive system of alliances and partnerships” (Prince 2019). The policies that emerged from this vision included a commitment to establish multilateral regional infrastructural projects through, for example, the BUILD Act, Prosper Africa, and the Blue Dot Network. The United States also put its weight behind other “connectivity” initiatives that countries such as Japan and India launched. At the same time, it committed itself to the Free and Open Indo-Pacific, a concept originally understood in terms of maritime security, but increasingly also was represented in terms of connectivity and economic development.

Forms of Power Although widely invoked, the concepts of soft power and economic power (used in the preceding section of this chapter) require some unpacking. While policy tools and projects can rest on efforts to deploy soft power through public diplomacy and framing by either states or nongovernmental organizations (NGOs), it is by definition not particularly amenable to command and control by governments (Nye 2009: 160; Layne 2010: 58). Instead, it is based on the perceptions of other nations. Joseph S. Nye described soft power in terms of a nation’s overall attractiveness and lure: “Soft power is the ability to get what you want through attraction rather than coercion or payments” (Nye 2004: 256). It is structured around a country’s values, culture, and foreign policies and, thereby, rests on legitimacy (Izadi and Saghaye-Biria 2018: 270–271; Nye 2011: 84). While China has often been regarded as weak in terms of soft power capabilities, the BRI has had a lure in Asia and Africa that went beyond a simple economic calculus. It also promoted China’s development model. In some ways, it has seemed to offer a more compelling narrative than the many uncertainties of free-market capitalism and the West’s patchy record in providing development aid. Just as the rates of economic growth in the

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USSR had in the 1930s and at times during the postwar years been a source of soft power that drew in admirers, the message of growth, development, and “win-win cooperation” secured some adherents (A. Gupta 2018: 55; Voon and Xu 2020). Having said this, it is important to note, as Nye himself stresses, that hard and soft power are not separate and discrete categories. Instead, they lie toward the ends of a continuum (Nye 2004: 8; Carminati 2021: 22; Rothman 2011: 50). That continuum stretches from the hard power end, with the use of direct coercion, the issuance of threats, demands for payment, and the imposition of sanctions, to the soft power end of the continuum, with the capacity to frame and the power of attraction (Heydarian 2015: 43; Nye 2013: 564). Within such a continuum, economic power, on which the BRI and the other initiatives pursued by the United States rely, lies somewhere in the middle between hard and soft forms of power. It is an amalgam that draws on both soft and hard power in significant proportions. It can, in other words, compel and seduce at the same time (Nye 2006). If we take an example drawn from domestic economic policy, the commitment to sustained budget deficit reduction pursued in much of the West from 2010 onward, was such an amalgam. It had hard power dimensions, as groupings and constituencies dependent on government provision were adversely affected and politically disempowered. The policy, however, also had soft power dimensions as it conveyed a powerful legitimizing narrative. Indeed, significant numbers were co-opted into forms of policy based around “austerity” because it had an “everyday” rationale, appeared to bolster a nation’s economy, and curbed the growth of big government (Whalley 2009: 6; L. Stanley 2016).

Capabilities and Capacities The degree to which states can deploy different forms of power is nonetheless always open to question. Hard power requires military capabilities. Economic power necessitates the capacity to provide funding. Soft power is often resistant to purposeful deployment in that attraction cannot be generated simply by trumpeting a country’s virtues unless there is a solid material basis for it. That does not mean, however, that soft power instruments can never be deployed. Within some settings, it can be channeled or at times mobilized. The United States has sought at times to promote certain discourses, such as modernization or human rights, to add to its global leverage (Izadi and Saghaye-Biria 2018: 269–270). Following the collapse of the Soviet bloc, US commentators recalled the part some soft power projects played in weakening the Soviet bloc during the Cold War years, although they were, of course, underpinned by the United States’ military and economic might.

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These projects included the Voice of America, the promotion of rights and religious freedom, cultural exchange programs, foreign aid and assistance, and public diplomacy (Nye 2011: 93). The capacity to use soft power effectively appears to rest on three variables. First, a soft power initiative that runs counter to the ways in which that nation is more broadly understood and perceived will have relatively little credibility. It can easily be disregarded as mere propaganda. The United States’ efforts to promote human rights discourses have been held back by institutionalized racism within the United States itself and Washington’s associations with regimes that deny rights. Commentators in Beijing counter claims about human rights in China by pointing to discrimination and deprivation within the United States as denials of rights (Global Times 2021). Second, as has been shown, soft power is by definition rooted in (or in large part dependent on) civil society and nonstate actors. There are limits on the capacity of state actors to employ it in ways of their own choosing. Indeed, soft power may often have little or nothing to do with the ways in which certain officeholders are perceived. Trump’s election to the presidency in 2016 was viewed negatively across many countries, and US soft power capacities thus appeared to be in jeopardy. A cross-national study of thirty-seven countries found that a median of just 22 percent had “confidence in Trump to do the right thing when it comes to international affairs.” In contrast, a median of 64 percent expressed confidence in Barack Obama during his final years. Trump scored more highly than Obama in only Russia and Israel (Wike et al. 2017). Nonetheless, as polls and commentaries suggest, and notwithstanding Trump’s unpopularity in many parts of the world, the United States still commanded substantial soft as well as hard power because it was seen as being based on job creation, open markets, and rights. There are also important soft power poles of attraction within American society, perhaps notably the universities (Wojciuk 2018: 354). Third, all forms of power are, of course, relational. Soft power is a social construct and dependent on the eye of the beholder. Audiences are not passive. The intentions or goals of those promoting a particular soft power initiative (insofar as soft power can be used deliberatively) may be interpreted and understood by the recipients or potential recipients in a very different way than that originally intended (Rawnsley 2016: 20).

Policy Consequences Why did the National Security Strategy, published less than a year after Trump’s inauguration, break so radically with the defining tenets of Trumpism? Why did it look toward allies and partners and, at the same

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time, talk in soft power terms about public diplomacy and the promotion of American values? The answer is in part, as has been noted, that the strategy appears to have owed little to the president himself. There were well-charted fractures within the Trump administration involving figures such as Secretary of Defense Mattis, who almost certainly played more of a role in policy development. Mattis and the other “adults” in the administration generally drew on what has been termed “conservative” or “militant” internationalism. While they talked in more resolute and overtly nationalist terms, affirming the importance of unilateral US actions should the need arise, they still shared some of the guiding assumptions made by the broader foreign policy community. They had an abiding faith in markets and free trade, backed NATO and other alliances, and, although skeptical toward the United Nations and hostile to “globalism,” accepted the role of some multinational bodies such as the International Monetary Fund and the World Bank (Ashbee and Hurst 2020: 10). Nonetheless, they had also cheered on President George W. Bush’s war on terror long after others had become fearful of a quagmire, condemned what they regarded as Obama’s accommodations, and applauded Trump once (but generally not before) he had won the 2016 presidential election. Just as importantly, there were also few policy alternatives open to the Trump White House. While the United States had substantial soft power resources in broad and abstract terms, it had only limited resources itself that could feasibly be brought to bear and mobilized across the Asian region. And given budget constraints and opposition to increases in federal government expenditure commitments beyond hard power military commitments, there were limited economic resources that could be used to secure leverage. At the same time, as noted above, some allies and partners had strengths of their own and there was therefore little reason why the United States should bear the full burden. Japan, in particular, had significant regional influence and a record of contributions to infrastructural development. Indeed, between 2000 and 2017, Japan spent $230 billion on infrastructure projects compared with $155 billion spent by China (Patey 2021: 124).8 There were also pressures on the administration from within the US policy communities to move away from a simple hard power stance. While the Trump election campaign had framed itself as an assault on entrenched elites within the Washington beltway, pledged that it would “drain the swamp,” and was dismissive of those who sought to promote “globalist” interests or organizations, the Trump administration was like others dependent on its staff members. The administration, however, had to draw on a relatively limited pool of those employed in the conservative

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and Republican-aligned think tanks, such as the Heritage Foundation, who had not gone on record during 2015–2016 in criticizing Trump. While loyalty from the beginning was regarded as a prerequisite for service, the administration was compelled at times to depend on the career civil service and those in the knowledge regime who did not share its basic instincts.

Summary This chapter has charted the turn against the BRI during 2017. It identified the character of the critique that echoed through the Trump administration, across much of the foreign policy community, and increasingly among many US allies and partners. The chapter argued that the commitment to counter the BRI pulled US foreign policy, despite all Trump’s political instincts and his faith in hard power, toward multilateral initiatives and the use of softer forms of power. The policy turn owed much to the “adults” in the administration and relatively little to the president himself. In the following chapter, I consider two of the specific initiatives that were established so as to counter the BRI: the BUILD Act and Prosper Africa.

Notes 1. There were, however, no senior US officials at the Second Belt and Road Forum held two years later in April 2019 (Gan and Delaney 2019). A Department of State official said: “We will continue to raise concerns about opaque financing practices, poor governance, and disregard for internationally accepted norms and standards, which undermine many of the standards and principles that we rely upon to promote sustainable, inclusive development, and to maintain stability and a rulesbased order. We have repeatedly called on China to address these concerns” (Reuters 2019). 2. Perhaps purposively James Mattis used the BRI’s original name of One Belt One Road, which was more directly suggestive of a Chinese Communist Party proclamation or slogan. 3. It should be added that US hegemony and its capacity to deploy military power rests in significant part on its control of the global commons (A. Gupta 2018: 47). The BRI threatened to impose limits on that control. 4. Other commentators also point to the potential military significance of the ports developed under the auspices of the BRI (Doshi 2021: 245). 5. It has been noted that China offers only limited foreign aid and, thus, there is a 31:1 ratio of loans to grants. Furthermore, forty of the fifty biggest loans from Chinese state-owned enterprises to foreign borrowers are collateralized (Kuo 2021). 6. There have been suggestions that countries that participate in the BRI are then able to secure greater access to Chinese markets. Italy, the only major Western

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European country to engage with the BRI at an official level, increased its exports to China by 63 percent during the first seven months of 2021 (Savic 2021). 7. There was also the Health Silk Road, which initially focused on public health and bolstering people-to-people exchanges, but as the Covid-19 pandemic took its toll, it concentrated on weaknesses in the health infrastructure. 8. It should be noted that US efforts to construct a close relationship with allies and partners across Asia was often impeded by President Trump’s mercurial style, which fueled policy instability, and his administration’s commitments to protectionism and its efforts to compel allies to contribute a greater proportion of their GDP to defense spending.

4 The BUILD Act and Prosper Africa

During his 2015–2016 presidential election campaign, Donald Trump repeatedly made a pledge to restore American fortunes. “Make America Great Again” had implications in terms of both domestic policy and the United States’ global role. Trump denounced what he depicted as the weakness of US forces: “Our adversaries are chomping at the bit. . . . We want to deter, avoid and prevent conflict through our unquestioned military strength” (A. Parker and Rosenberg 2016). While on the campaign trail, just ahead of the election, he called for the recruit of 90,000 new soldiers and the construction of nearly seventy-five new ships necessitating up to $90 billion a year in additional defense spending. This won backing from about ninety retired military officials who publicly supported his campaign (A. Parker and Rosenberg 2016). As has been seen, it followed as a corollary that the commitment of some preceding administrations to nation building through engagement with the construction of governance structures and the promotion of democratic values had little place in the Trumpian worldview and his pursuit of “foreign policy realism” focused on the destruction of threats to US vital interests (Colvin 2016). Within this context, there was suspicion of the deep state that was, it was said, guilty of betraying US interests and particular disdain for the State Department and the agencies in Washington that had traditionally been engaged in public diplomacy and soft power efforts across emerging markets and areas of conflict. At a personal level Trump had, prior to his election as president shown little sympathy for US soft power initiatives through the provision of foreign aid and the activities of foreign aid workers. In the midst of the 2014 Ebola crisis in West Africa, he famously tweeted: “People that go to faraway places to help out are great—but must 65

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suffer the consequences” (Norris 2021: 229). Furthermore, resources had to be concentrated in the American homeland rather than disbursed abroad. There was, he asserted, little return for the United States in foreign aid: “We give money to countries, but we don’t give money to our own country. . . . They do nothing for us” (Norris 2021: 230). Although the Republican Party elites did not generally talk in these terms and indeed only committed themselves to Trump once he had secured the presidency, these attacks won plaudits among many grassroots Republicans and corresponded with established conservative hostility to the “swamp,” the federal state apparatus and “wasteful” forms of spending.

First Steps The Trump administration’s first proposed budget, published early in 2017, reflected these political priorities. It was as Mick Mulvaney, then director of the Office of Management and Budget (OMB), asserted: “It is not a softpower budget. This is a hard-power budget” (Norris 2021: 231). The budget sought to eliminate the Overseas Private Investment Corporation (OPIC), which had been established in 1971 and at that point was responsible for supporting the provision of development finance through, for example, risk assurance in emerging markets. It was scheduled for administrative demolition along with other long-standing conservative institutional targets across Washington, including the National Endowment for the Arts and the National Endowment for the Humanities as well as the Export-Import Bank, which had guaranteed loans to foreign customers of US firms from the 1930s onward. The budget also sought a 30 percent cut in foreign aid along with the termination of programs addressing climate and gender. Instead, the budget concentrated resources on increases in military expenditure. It proposed a 10 percent rise in the Pentagon’s base budget, which was to include the acquisition of new jets for the air force and ships for the navy (New York Times 2017). OPIC was not important as a drain on federal expenditure. Instead, its significance was as a symbol of excessive and profligate government. As the New York Times reported, “While the total amount of annual savings . . . would be comparatively small, administration officials want to highlight the agencies in their coming budget proposal as examples of misuse of taxpayer dollars” (LaFraniere and Rappeport 2017). The move also appeased the demands of the Heritage Foundation and the House of Representatives’ Freedom Caucus, which had called for the cutting of OPIC (Saldinger 2017). It is worth adding that the director of budget policy and deputy director of the Domestic Policy Council at that point was Paul Winfree from the Heritage Foundation. Furthermore, OPIC was institutionally vulnerable.

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Before 2007, the agency had generally been given five-year reauthorizations. But from then onward, authorization was renewed annually.

Policy Turnaround Nonetheless, notwithstanding the early statements and conservative zeal for its abolition, OPIC was not demolished and soft power efforts were not abandoned. While these may well not have been decisions made by the president himself, he at some point signed off on actions that rolled back his campaign pledges and the initial steps taken by the White House. Some months after the administration had put forward its first proposed budget, Trump committed himself to reforming and strengthening US development finance tools when he spoke at the Asia-Pacific Economic Cooperation forum in November 2017. Then, in early October 2018, just eighteen months after the White House had scheduled OPIC for elimination, he signed the Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act), which formed part of legislation reauthorizing the Federal Aviation Administration into law. It expanded OPIC and its work by detaching the Development Credit Authority (DCA) from the US Agency for International Development (USAID) and adding it to OPIC to create a new and enlarged agency: the US International Development Finance Corporation (IDFC). Although there were no direct references to China in the BUILD Act, commentators had little doubt about its overall purpose. A headline in the South China Morning Post was explicit about the defining purpose of the act: “Trump strikes a blow in US-China struggle with Build Act to contain Xi’s Belt and Road” (Jaipragas 2018). The Congressional Research Service used much more restrained language, but echoed the South China Morning Post headline: A key policy rationale for the BUILD Act was to respond to China’s Belt and Road Initiative (BRI) and China’s growing economic influence in developing countries. In this regard, the IDFC aims to advance US influence in developing countries by incentivizing private investment as an alternative to a state-directed investment model. (Congressional Research Service 2019b)

The IDFC was to be charged with extending loans to business ventures engaged, for example, in the development of energy, ports, and water infrastructure projects in low-income countries. With a $60 billion budget, it would “mobilize and facilitate the participation of private sector capital and skills in the economic development” of developing nations (Congressional Research Service 2019b). There was, furthermore, a commitment to address

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the challenges in cooperation with established US allies, including Canada, Japan, the United Kingdom, and the Netherlands. By September 2020, the IDFC was engaged in more than 200 projects in the Indo-Pacific with commitments amounting to $5.4 billion (Parpiani 2021). Why was there such an abrupt and sharp policy turnaround? Much of the answer lies in the shifts that have been noted above. Whatever the president might have said or pledged, the administration embraced soft as well as hard power. In the case of OPIC and the IDFC, there were also, however, lobbying efforts by a loose coalition that stretched across the aisle (Saldinger 2018). Some of those involved framed their calls for development finance in transactional terms, whereby the United States could secure or retain relations with, or policy concessions in other arenas from, particular countries. This was a form of discourse that had resonance in the Trump White House. The administration’s pronounced distrust of multilateral institutions in which it did not have a controlling voice—institutions which would have had to take on more of a role if the United States had radically scaled back its contributions to development finance—may also have been a contributing factor (Norris 2021: 234). Above all, however, as the wording of the act suggested, the shift in policy toward China, and with it the BRI, during the course of 2017 and 2018 necessitated tools with which Chinese influence could be countered (Saldinger 2018). The IDFC and the provision of development finance accounted for one such policy tool.

Creating an Administrative Infrastructure The institutional architects behind the BUILD Act clearly hoped that the IDFC would be greater than the sum of its parts. The DCA, as a component part of USAID, had provided partial credit guarantees to mobilize local financing in emerging economies. Between 1999 and 2016, it had facilitated $4.8 billion in credit to entrepreneurs and networks in seventy-six different countries (Development Credit Authority 2016). It gave loans for infrastructure projects, but also contributed to initiatives in agriculture, health, the environment, housing, water supply, and education (USAID, Development Credit Authority n.d.). DCA provision rested on loan guarantee agreements to encourage lending by the private sector in developing sectors and regions, while at the same time demonstrating the long-term viability of commercial investment in developing markets. Entrepreneurs were thereby being empowered, it was said, “at a minimal cost to the US taxpayer” (USAID, Development Credit Authority n.d.). The agency highlighted its record in providing support to ventures that had commercial potential and pointed out that its cumulative default rate had, by 2013, been just 1.85 percent (USAID, Development Credit Authority n.d.).

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OPIC had been established during the Richard Nixon era and undertook activities from 1971 onward. It was shaped by the belief, which informed the creation of other agencies in the United States and other countries, that government could play a proactive role in stimulating the growth of global capitalism but was also seen in transactional terms as a means of securing leverage with developing countries during a historical period shaped by the war in Southeast Asia (Norris 2021: 82). At the same time, OPIC sought to import business methods and the business spirit to foreign assistance processes that, it was felt, had formerly been lacking. OPIC’s purpose was to draw private capital toward economic development projects in the emerging markets. It assisted US firms in establishing an initial foothold in developing countries through, for example, the provision of finance, guarantees, and political risk insurance. Assistance and development aside, this provided a commercial payoff for US firms. OPIC reported having supported more than $200 billion of investment in more than 4,000 projects thereby generating an estimated $76 billion in US exports and supporting more than 278,000 US jobs (Devex n.d.). These descriptions alone provide a clear administrative rationale for the fusion of OPIC and the DCA. Their functions self-evidently overlapped in a way that is a commonplace characteristic of the US federal state apparatus. Nonetheless, the foundation of the IDFC through passage of the BUILD Act went beyond a simple administrative fusion or a mere rebranding. In contrast with OPIC and the DCA, its goals were pitched at a higher level of ambition and, while unnamed, China and the BRI (statedirected initiatives) served as a significant Other. The IDFC committed itself to making “America a stronger and more competitive leader on the global development stage, with greater ability to partner with allies on transformative projects and provide financially sound alternatives to statedirected initiatives that can leave developing countries worse off” (US International Development Finance Corporation 2018). The IDFC was meant to have the capacity to make equity investments— in other words, it could purchase shares in publicly traded firms. It would have a higher investment limit of $60 billion, more than double that given to OPIC. Furthermore, the IDFC could issue guarantees and loans in local currency rather than US dollars, thereby removing the risks incurred by currency exchange (Ingram 2018). It also was authorized to undertake technical assistance and feasibility studies allowing it to be more proactive. The BUILD Act emphasized that there would be a strong provision for monitoring, evaluation, and learning (Ingram 2018). Furthermore, it was said, there would be a more explicit focus on facilitating inclusive forms of economic growth in the least developed countries. At the same time, in an effort to address the Byzantine character of the federal government apparatus, there

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was a promise of increased cooperation across government (US International Development Finance Corporation 2020).

Soft Power A commentary published by the Center for Strategic and International Studies described the BUILD Act as “the most important piece of US soft power legislation in more than a decade” (Runde and Bandura 2018). Two comments should, however, be made about the act and the IDFC. First, while commentators had little doubt about the overall goal and purpose of the BUILD Act and the role of the IDFC, its focus on the BRI and China was, as shown above, ever present but for the most part stated in implicit rather than explicit terms. This form of wording may, however, have implications for the agency’s activities insofar as its formal mandate is relatively broad and loose. Because of this, it has been suggested that “the failure to narrow the IDFC’s scope makes it likely that the new entity may support projects of limited US foreign policy and strategic interest” (Congressional Research Service 2019b: 4). In other words, the IDFC’s loose mandate may hold back efforts to use the new agency and its resources as a way of countering the BRI. According to an IDFC presentation, the agency had $5.4 billion of commitments in the Indo-Pacific compared with $10.4 billion in South America (US International Development Finance Corporation 2022: 5). As of 2020, however, just 8.9 percent of BRI investments were in South America, whereas more than 70 percent were in Asia and sub-Saharan Africa (Nedopil 2021: 7).1 Second, while by fusing OPIC and the DCA, the act provided a degree of administrative rationalization, US efforts to counter China’s rising economic strength continued to be constrained, and at times even hobbled, by the structures of the US state apparatus.

Prosper Africa Prosper Africa emerged as a further and allied policy initiative. It was announced in late 2018, although its formal launch took place only in mid2019 in Mozambique. Prosper Africa’s publicly stated goals did not include references to the BRI or infrastructure as such, but sought to promote development through “advancing US trade and commercial ties with nations across the region to benefit both the United States and Africa.” Indeed, it envisaged the doubling of US-Africa trade, the bolstering of security thereby “countering the threat from radical Islamic terrorism and violent conflict,” and the spurring of growth. It would ensure that US taxpayer dollars for aid were used efficiently and, at the same time, demon-

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strate “the superior value proposition of transparent markets and private enterprise for driving growth” (Congressional Research Service 2019a: 1). Nonetheless, although China and the BRI were not directly cited, John Bolton, who served as national security advisor between April 2018 and September 2019, quickly brought the thinking underlying Prosper Africa’s stated policy goals into the open. In a speech to the Heritage Foundation, which had closely aligned itself with the Trump administration and supplied many of its staff members, he framed Prosper Africa as a strategic answer to the BRI (using its former title One Belt One Road), China’s other commercial initiatives, and its military ambitions. Bolton did not speak in uncertain terms: China uses bribes, opaque agreements, and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands. Its investment ventures are riddled with corruption, and do not meet the same environmental or ethical standards as US developmental programs. Such predatory actions are sub-components of broader Chinese strategic initiatives, including “One Belt, One Road”—a plan to develop a series of trade routes leading to and from China with the ultimate goal of advancing Chinese global dominance. (White House 2018)

What basis was there for claims such as these? China had made significant inroads into Africa under the auspices of the BRI, although projects initiated under the banner of the BRI built on a record of earlier infrastructure construction. A 2019 report noted that China was, by then, the single largest source of funding for the development of African infrastructure. Its institutions and firms financed one in five projects and constructed one in three (Marais and Labuschagne 2019). By 2020, the BRI had projects in fifty-two out of the fifty-four African countries. There was a particular focus on ports and port areas and connectivity (road and rail) so that energy projects and resources were tied together. According to Chinese statistics, forty-nine countries had signed BRI Memorandums of Understanding (Lokanathan 2020: 3).2 Prosper Africa would, it was said, offer a policy alternative across the continent. It would bring together existing government programs and the efforts of sixteen US government agencies and departments, particularly those focused on business, trade, and development. This would be done, the administration insisted, “in a cohesive, coordinated manner” (Congressional Research Service 2019a: 1). Furthermore, each US embassy on the African continent would establish a Prosper Africa “deal team” that would connect US firms with trade and investment opportunities while, at the same time, assisting African firms seeking opportunities in US markets. Development assistance would go hand in hand, it was promised, with the pursuit of “modern, comprehensive trade agreements on the continent

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that ensure fair and reciprocal exchange between the United States and the nations of Africa” (White House 2018). In arguing the case for such trade agreements, Robert Lighthizer, US trade representative, framed it as a way of countering and checking Chinese ambition: “We’re only a few years away from [Africa] being the population center of the world . . . and if we don’t figure out a way to move them right then China and others are going to move them in the wrong direction” (Caporal, Hoffner, and Tuljapurkar 2020). Alongside this, the turn to institution building to provide a stable basis for development and trade was emphasized through a commitment to assist “in building the capacity of partner forces and security institutions to provide effective and sustainable security and law enforcement services” (White House 2018).3

Leverage The BUILD Act (and thus the IDFC) and Prosper Africa rested on faith in private sector initiatives and commercial principles, although there were hopes that the IDFC’s different initiatives could compensate for the risks and transaction costs that firms faced when considering infrastructure projects in emerging economies. The act promised “an economically viable form of private sector–led investment, offering a robust alternative to statedirected investment which often leaves countries saddled with debt” (US International Development Finance Corporation 2018). How were these goals to be realized? The BUILD Act and the IDFC were to be structured around the mobilization of private sector capital and not the extensive use of public sector resources. In part, this simply echoed the established principles underpinning development aid across many developed nations. It stemmed from an inherent faith in market forces whether in the United States or beyond US shores. An implied aim of the act thus was not only to provide alternative sources of funding to contest the BRI, but also to lead recipient countries away from a growth model structured around a government-directed trajectory. Instead, the act and the IDFC would seek to coax emerging economies toward marketbased development. Alongside this, there was some acknowledgment of the hard reality that the United States could not compete “dollar-for-dollar” with the BRI and its funding sources. Instead, it was asserted that relatively small sums of public money, or loan guarantees, could leverage much larger forms of private sector activity. Whereas government provision is often said to “crowd out” free-market activity and reduce private investment, there would be “crowding in” effects in that government provision and funding would lead to an overall increase in investment: “Official aid donors . . .

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should use their financial resources strategically to catalyze flows of private capital towards development challenges and build a robust private sector in developing countries” (Jaipragas 2018). Given this framework, it followed that private firms would grasp the investment opportunities with this backing: “There are trillions of infrastructure funding needs where the private sector could become a significant investor. Globally, there are 1.1 billion people without electricity, close to 3 billion without clean cooking facilities, 1 billion without access to safe water, and 2.3 billion have no access to improved sanitation. Through the BUILD Act, these infrastructure challenges can be viewed as opportunities for the United States” (Jaipragas 2018). In sum, as the chief executive officer put it, the IDFC would by “leveraging the private sector to support sustainable, transparent, and responsible investments . . . advance a modernized approach to development that promises unprecedented impact” (US International Development Finance Corporation 2020). There was a further overlapping claim. Once that “unprecedented impact” had been secured, the economic and political space for BRI projects would be limited indeed.

Limits There are nonetheless doubts about the extent to which a limited degree of commitment from an agency could generate the returns that the policy statements envisaged. In other words, given the challenges inherent within large-scale infrastructure projects, can relatively small amounts of public funding leverage much larger amounts of private capital? Even in developed countries with secure legal frameworks, infrastructural projects face significant hurdles securing investment funds or staying within the projected costs and timescales. Sunk costs tend to be high indeed. Infrastructure is a long-term commitment that necessarily has to be based on relatively speculative forecasts of likely usage. In sum, there will be countless uncertainties on the supply and the demand side. There are also administrative obstacles. The relationship between development finance and the policy initiatives pursued by other agencies and departments across Washington has an uncertain character. At the least, overlap and duplication is inevitable. Just after Bolton launched Prosper Africa, the US Agency for International Development announced its Private Sector Engagement Policy asserting in language similar to that employed by Prosper Africa that the “future of international development is enterprise-driven” and that it would work closely with US firms (Schneidman and Signé 2018). Furthermore, earlier US development policy initiatives have created a dense institutional landscape across continents, but particularly in Africa, where it is

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structured around bodies such as the Millennium Challenge Corporation, the US President’s Emergency Plan for AIDS Relief (PEPFAR), the Young Africa Leaders Initiative, and Power Africa. The density of the landscape impedes later projects and developments. There were also clashes between the Trump administration’s different goals and instincts. It had, for example, been an article of faith since the early days of the presidential election campaign that if there were to be trade agreements, they should be bilateral in character and subject to conditions thereby giving the United States rather more bargaining strength in setting terms. There was also, of course, a readiness by the White House to impose tariffs that had created a sharp divide between the United States and its allies in Europe and Asia. Nonetheless, as the countries of Africa asserted, the prospects for economic growth and development across the continent demanded, for the most part, large-scale multilateral trading arrangements through the African Continental Free Trade Area (AfCFTA) (Schneidman and Signé 2018). 4 Indeed, by early 2022, AfCFTA had been ratified by forty-one out of the fifty-five African countries (The Economist 2022: 29). Furthermore, the countries of Africa as well as Asia were generally cautious about being signed up to a seeming crusade against Beijing. In part, it is a matter of sovereignty and alignment. However, timing and sequencing also matter here. China’s economic influence has reached a point in recent years where the potential costs for individual countries if they “take sides” between Washington and Beijing have significantly increased. Within Asia, the Blue Dot Network (BDN) might have secured a degree of backing, or at least acquiescence, had it been created at an earlier point. It was, however, founded only once the BRI and other Chinesebacked initiatives (such as the Infrastructure Investment Bank and the Regional Comprehensive Economic Partnership) were solidly entrenched. Furthermore, trading relations between China and many countries across the Asian region were continuing to grow. Thus, the impact of an initiative undertaken in 2014 would be different than one launched in 2019 (Denmark 2020: 75; Shambaugh 2021: 245). By 2019, there was a widely shared reluctance to take sides between Washington and Beijing (Gurtov 2021: 105). Many countries trod gingerly. In Africa, sovereignty issues came to the fore. In March 2020, the Trump administration notified Congress that it would move forward with negotiations to secure a free-trade agreement with Kenya, which it asserted would serve as a model for trade agreements with countries across the continent (Office of the United States Trade Representative 2020). Nonetheless, Kenyan president Uhuru Kenyatta stressed that agreements could not be allowed to restrict his country’s freedom of action or limit

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Kenya’s ability to cooperate with China: “We don’t want to be forced to choose (and we) want to work with everybody, and we think there is opportunity for everybody. There are those areas indeed where America stands out and has much, much better strengths in certain fields. On the other hand, you have the Chinese who build hospitals in seven days” (Agence France-Presse 2020).5

Summary This chapter has considered the impact of the BUILD Act and Prosper Africa. While the former was directly structured around infrastructural development, the latter was more loosely put forward as a route toward economic growth across the African continent. Both were at times framed as ways to counter the BRI and check Chinese strategic ambition. These efforts by the Trump administration were structured, however, around a leverage model of development heavily dependent on private capital that may be difficult to realize. There are also administrative obstacles arising from the structural complexities of the “administrative state” in Washington and the programs were at times, at least while President Trump was in office, undercut by the erratic character of White House policymaking and the administration’s commitment to economic nationalism. Nonetheless, despite their inherent limitations, measures such as these established a path and a policy framework that the Biden administration not only inherited but, through its decisions and actions, reaffirmed. Chapter 5 continues my assessment of US-led initiatives by considering the role of the Blue Dot Network and the certification of “quality” infrastructure projects.

Notes 1. The BRI’s place within South America was not, however, completely overlooked. In December 2019, the United States established the América Crece (Growth in the Americas) initiative to encourage private investment in energy, road, port, and airport projects. América Crece was not given additional funding (European Parliament 2021: 6). 2. There were, however, limits on the development of transnational projects (Lokanathan 2020: 5). 3. Nonetheless, commentators were uncertain how Prosper Africa might secure more than the trade hubs that the USAID sought to establish and the activities that had been undertaken by the Barack Obama administration’s Trade Africa and Doing Business in Africa initiatives. 4. There were no US free-trade agreements with African countries, although the African Growth and Opportunity Act (AGOA) provided for the duty-free treatment

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of goods from certain sub-Saharan African nations subject to conditions such as commitments to preserving a market-based economy, protecting labor rights, and combating corruption (US Customs and Border Protection 2021). 5. It should be added that the United States was also behind the European Union in terms of developing trade ties. The EU concluded an agreement with the Southern Africa Development Community, which, the US trade representative had noted, would “further erode US export competitiveness in the region” (Schneidman and Signé 2018).

5 Vetting Infrastructure Projects

The Blue Dot Network (BDN) was a further policy initiative founded during Donald Trump’s term of office and led by the United States although it was launched in conjunction with Australia and Japan. Like the Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act), it was not directly or overtly framed in terms of opposition to the Belt and Road Initiative (BRI) or, indeed, China. Its declared goal was to “promote quality infrastructure investment that is open and inclusive, transparent, economically viable, financially, environmentally and socially sustainable, and compliant with international standards, laws, and regulations” (US Department of State n.d.b.). Few, however, had doubts about its intended purpose. Quality was a pivotal term that had been widely used during the preceding years as a way of counterposing infrastructural projects initiated by Japan or Western countries from those launched under the auspices of the BRI. BRI projects, the term implied, were not of sufficient quality. The goal of the Blue Dot Network was therefore to reframe BRI projects in much more critical terms as substandard but also, through a certification process, to encourage and facilitate investment in emerging economies from countries aside from China.

Founding the Blue Dot Network The Blue Dot Network was announced at a US-sponsored Indo-Pacific Business Forum that took place alongside the Association of Southeast Asian Nations (ASEAN) thirty-fifth summit meeting, held in Bangkok in November 2019. It was perhaps noteworthy that both the BRI and the BDN were formally launched in Southeast Asian capitals. This highlighted the 77

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importance of that region in terms of infrastructural development and connectivity across the wider Indo-Pacific and in the strategic considerations of policymakers in Beijing and Washington (Sundararaman 2021). The BDN had been developed by the US International Development Finance Corporation, the Japan Bank for International Cooperation, and the Department of Foreign Affairs and Trade of Australia (Reed 2019). It would bring “governments, the private sector and civil society together to invest in global infrastructure built on globally trusted standards” (US Mission to ASEAN 2019). What did this mean in practice? Its principal purpose was to evaluate and then, based on this, certify the quality of proposed infrastructural development initiatives. The term quality had the capacity to capture different policy ideas and political preferences across North America, Asia, and Europe. It encompassed assertions that infrastructural projects should be market driven and thus on this basis be not only financially sustainable but also socially and environmentally responsible. These principles extended to procurement processes that, it was said, had to be transparent, accountable, and inclusive. In January 2020, a survey conducted by the European Union Chamber of Commerce in China found that the perceived lack of transparency in procurements was a key factor curtailing the participation of European companies (Sundararaman 2021). The concept of quality in infrastructural provision went further. In certifying projects, the BDN would look for opportunities to provide binding contractual assurances rather than the nonbinding Memorandums of Understanding that formed the basis for developing BRI projects (Nagy 2021: 16). The BDN was, furthermore, to use the principles laid out in the Group of 20 (G-20) Principles for Quality Infrastructure Investment, the Group of 7 (G7) Charlevoix Commitment on Innovative Financing for Development, and the Equator Principles (Charlevoix G7 2018 2018; Equator Principles Association 2020: 1). These provided a risk management framework. The BDN was in large part an effort to operationalize principles that had already been agreed upon and accepted across international organizations and countries, albeit in broad terms.

Risk and Uncertainty The public rationale for the BDN did not reference the BRI or, indeed, China. Instead, it was framed as a development initiative that would provide a basis for the provision of global public goods. In many instances, it was argued, Western and Japanese firms held back from infrastructural investment in developing countries because they saw the prospect as too risky and uncertain (Global Construction Review 2021). The BRI, which was more ready to accept risk, had moved in to fill the gap.

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The purpose of the BDN was to reduce that risk and uncertainty and, thereby, counter the BRI by encouraging independent assessments of quality. Positive assessments of potential projects and testimony as to their viability would, it was said, encourage alternative sources of investment in infrastructural development projects in emerging markets to those offered through the BRI. In sum, the BDN would reduce or eliminate the capacity of firms associated with the BRI to secure contracts simply by offering the lowest bid. Certification by a trusted and authoritative body would “provide private and public financing institutions additional confidence and information when they look to provide funding for development projects. This will help mitigate financing risks. It will also help developing nations make decisions about projects that best meet their needs and national interests” (US Department of State n.d.a). Therefore, the BDN was not to be a source of funding for infrastructural development projects in itself, but would instead act as a “rating agency” (Hawksley 2020; Reed 2019; Panda 2020: 11). Indeed, it was neatly described on this basis as the “Michelin Guide” for infrastructure (S. Roy 2020). There were from the outset promising signs that India would also engage with the BDN alongside its efforts to ensure a Free and Open IndoPacific (Sundararaman 2021). Commentaries noted that given its anxieties about the BRI and ongoing tensions with China, which had been bolstered by the BRI’s early engagement with Pakistan as well as border disputes, there was a strong case for India joining or collaborating with the BDN (Panda 2020). Such a move would certainly have given the network much greater credibility and leverage. India’s involvement, however, took only a limited form. The Indian government officially reserved judgment and it was left to President Trump and Indian prime minister Narendra Modi to issue a statement emphasizing the need for “sustainable, transparent, quality infrastructure development in the region” (Government of India, Ministry of External Affairs 2020).

Malaise Nonetheless, despite the initial flurry of activity and attention when the BDN was announced in November 2019, there was a growing sense over the period that followed that the network had “stalled” or even had been stillborn (Rubio 2020; Borton 2020). Little followed the initial declaration of the BDN’s existence until President Joe Biden took office at the beginning of 2021. Indeed, it was noted that while there had been some expressions of interest from the private sector and civil society, the BDN had not even taken the first necessary step of establishing criteria for certifying what might be considered quality projects at that point (Goodman 2021). Furthermore, India

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aside, there were relatively few suggestions of backing for the BDN from across the region. Taiwan joined in November 2020 (American Institute in Taiwan 2020). There were, at times, hopes that Vietnam would participate. While the country had endorsed the BRI and the Asian Infrastructure Investment Bank, it had long-established anxieties about China and, at the same time, had large-scale infrastructure needs (Borton 2020). In part, the malaise can be attributed to competition between personalities within the White House and the brief character of its attention span, as well as management strains and incapacities within the Department of State (Bublé 2020). Furthermore, the administration also had loose and uncertain ideational moorings and political trajectories, as well as priorities that were often subject to change. On top of this, there was only limited faith in US policy commitments and, given the degree of trading interdependence, few nations were ready to take steps that might antagonize Beijing. The Trump administration’s decision in January 2017 to withdraw from the Trans-Pacific Partnership (TPP) had seemed to signal a radical pulling back from the region and an abrupt repudiation of President Barack Obama’s Pivot to Asia, although having said that the Pivot remained more a matter of rhetoric than substance. Furthermore, established regional organizations, most notably ASEAN, felt that they were being treated with a degree of disdain (Sundararaman 2021). The frequent absence of the US president in key ASEAN meetings, as well as what was seen as the administration’s seeming inability to look beyond China, had an impact (Sundararaman 2021).

The Biden Administration, the BDN, and the OECD From January 2021 onward, the incoming Biden administration sought to distance itself from the Trump years. Nonetheless, it also moved quickly to emphasize its commitment to competition with China, albeit on the basis of a broader and more stable coalitional bloc. Indeed, at times, the new administration appeared to talk in more forceful terms than its predecessor. The BDN was reconfigured within this overall context. After some initial uncertainty about the new administration’s intentions, there was a relaunch of the network in early June 2021, involving leading financiers, infrastructure developers, construction companies, and representatives of civil society organizations (Fang 2021). It was announced that the BDN would, from then onward, work under the auspices of the Organisation for Economic Cooperation and Development (OECD) and build on its existing Trust in Business Initiative (OECD 2019). This initiative convened an Executive Consultation Group (ECG), drawing in 150 business and civil society leaders, which stressed that alongside environmental, social, and governance issues

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there were other significant barriers to investment in infrastructure projects. These included insufficient or unreliable data and a lack of certainty about relevant standards. Firms in the private sector generally had to depend on inhouse research rather than independent studies and, despite their limitations, use existing ratings or benchmarks (OECD 2021b: 5). The OECD’s secretary-general emphasized the ways in which the aims of the BDN and the OECD’s goals dovetailed together: “This initiative helps achieve many of the OECD’s core objectives—from environmental protection to ensuring responsible business conduct, high quality infrastructure governance, anti-corruption, gender equality, sustainable finance as well as economic and social progress.” The OECD was to “provide technical support for the BDN by building an evidence-base, mobilizing a multi-stakeholder partnership and designing the certification framework” (OECD 2021a). The relaunch of the BDN was quickly followed up with a succession of related announcements and statements of intent. The June 2021 G7 meeting in Cornwall was attended by world leaders who sought to reestablish the ties that had become frayed during the Trump years and they agreed to a global infrastructure plan (Build Back Better World [B3W]). In doing this, more direct forms of language were adopted. It was, as a White House Fact Sheet made explicit, a riposte to the BRI: “Today President Biden met with G7 leaders to discuss strategic competition with China and commit to concrete actions to help meet the tremendous infrastructure need in low and middle-income countries” (Goodman 2021). Infrastructure was also understood in broad terms. While funding was to be given to infrastructure projects “from railways to wind farms,” there was a particular emphasis on forms of provision that went beyond traditional conceptions of infrastructure: climate, health and health security, digital technology, and gender equity and equality (Bartlett 2021). The plan would, it was said, “help narrow the $40+ trillion infrastructure need in the developing world, which has been exacerbated by the COVID-19 pandemic” (White House 2021b). It would “collectively catalyze hundreds of billions of dollars of infrastructure investment for low- and middle-income countries in the coming years” (Bermingham and Delaney 2021).

The BDN and Certification Strategies The BDN is, in some respects, akin to the many different ranking and certification initiatives that have come to the fore during recent decades. It can therefore be considered initially within this framework. Ranking and certification initiatives have increasingly been employed as an alternative to formal regulation and are based on processes of

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benchmarking, coordination, and monitoring rather than direct instruction or direction (Cooley 2015: 18). Such initiatives have been hailed as a new and distinct “technology of global governance” (Cooley 2015: 2). They constitute a system of indirect governance that works through market effects. Firms securing certification or a high “score” in a ranking scheme, by for example pursuing recognized environmentally and socially responsible goals, enhance their reputations and are thereby likely on this basis to be “rewarded” by securing market advantages. As a corollary, those scoring poorly are likely to lose ground. While some ranking initiatives can be disregarded as simply a social media exercise, those that have a more “official” character by being tied to a widely recognized or authoritative organization have played a role in defining and changing meanings of key concepts (e.g., that of poverty) and thus have contributed to the making and development of public policy (Renckens 2015: 142; Cooley 2015: 24). Nonetheless, as much of the literature considering rankings and certification emphasizes, it is important not to draw overgeneralized conclusions about their efficacy. Such initiatives are vulnerable to gaming, and only certain forms of ranking are likely to have a significant impact on corporate behavior. At the same time, accounts suggest that market effects are a variable. Rankings will probably have the greatest impact in contexts where changes in a ranking lead directly and speedily to changes in a firm’s material costs, or offer material benefits that are readily visible to actors. Such visibility generally requires “league tables,” or scoring systems that secure wide attention, structured around forms of systematic monitoring that are comparative and quantitative in character (Kelley and Simmons 2015: 55). Furthermore, whereas some rankings are “imbued with normative significance,” others have less. Certain ranking initiatives strictly demarcate acceptable and unacceptable forms of behavior or empower particular actors and are, thus, likely to carry significant weight. Others are looser in character and may well be less authoritative (Kelley and Simmons 2015: 58–59). It should also be added that effective rankings and certification systems inevitably depend, in turn, on the authority and credibility of the issuing institutions and organizations. Those with the greatest credibility are generally those that appear neutral insofar as they are detached from government or advocacy organizations and base their activities on the application of credible research as well as professionalized norms (Cooley 2015: 25).

The BDN and Economic Power Nonetheless, while the BDN can be considered, as charted above, in terms of the distinct literature that has developed around certification and ranking initiatives, other analytical approaches are also relevant. In particular, given

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that the initiative is situated within the context of US-China competition, the prospects for the BDN should also be assessed in terms of power and the conceptual frameworks used to consider the different forms of power relationship (Kelley and Simmons 2015: 68). Particular attention should again be paid to the concepts of soft power, hard power, and power amalgams. In seeking to counter the BRI and draw developing countries toward quality infrastructure, the BDN rests on both soft and economic power. As has been seen, economic power has hard power dimensions in that it can have a coercive character. It is seeking to shift the calculus made by firms and nations when considering different options in terms of infrastructural provision and, in doing so, “compels” and “seduces” at the same time (Nye 2006).1 If domestic economic policy is considered, a particular fiscal policy, such as the commitment to budget deficit reduction pursued across much of the West from 2010 onward, had hard power dimensions in that groupings and constituencies dependent on government provision were adversely affected as austerity measures were imposed. Budget deficit reduction also, however, had soft power dimensions in that it was structured at every stage, and in every arena, around a legitimizing narrative that won elections. Significant numbers were co-opted into forms of policy based around “austerity” because it had an “everyday” rationale of structured savings and thrift (Whalley 2009; L. Stanley 2016). The BDN similarly rests on a power amalgam. It is structured around the promise of loans, yet at the same time there is a soft power message that not only stresses construction quality but is tied to good governance, transparency, responsible finance, and environmental protection. This is a forceful narrative. After President Biden took office and the BDN was adopted by the OECD, it could also draw on the organization’s credibility and legitimacy. Such credibility and legitimacy serve as a basis for political leverage: “Political struggles focus less on control over the ability to transmit information than over the creation and destruction of credibility” (Keohane and Nye 2021: 219). The OECD’s credibility (and thus that of the BDN) rests on the fact that it does not have regulatory jurisdiction, independent funding, or the ability to issue loans. Even more importantly, it is detached from particular states and governments; it has the appearance of independent professionalized neutrality and the capacity to make authoritative evaluations (Gallarotti 2015: 254). Furthermore, unlike some other international organizations, the OECD is not seen as overly tied to a neoliberal or globalist agenda. Indeed, it has, in the past, been accused of Keynesian sympathies. The OECD is also situated within a “complex multilateralism,” whereby it has relationships with civil society actors as well as governments and states. It has a reputation for extended forms of peer review, consensus-based decisionmaking, and

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consultation processes with nonmember countries as well as members (Woodward 2008: 77; Putnam and Bayne 1987: 155). In sum, “the OECD’s effectiveness depends on a combination of its established reputation for technical expertise, and the legitimacy and authority that this confers, combined with its unique trans-governmental structure, in which key decisions are made and implemented by policy experts from member states” (Eccleston 2011: 246).

Power Amalgams Revisited As shown above, the BDN rests on a power amalgam. In using the concept, it is easy to assume that different forms of power are complementary and build on each other. This is, after all, an approach that has considerable currency. Joseph Nye (2009) has referred to “smart power,” which is “the capacity of an actor to combine elements of hard power and soft power in ways that are mutually reinforcing such that the actor’s purposes are advanced effectively and efficiently” (Wilson 2008: 110). It has been argued, for example, that states can employ smart power through, for example, the supply of global public goods such as health provision, addressing climate change, and “maintaining an open, stable international economic system” (Nye 2009: 163; Jansson 2018: 344; Nye 2010: 10). The notion of power complementarities and certainly the concept of smart power imply, at a foundational level, that forms of power can be fused, harmonized, and managed. Fusion and harmonization depend, however, on the setting. First, they require a relatively high level of state capacity and command over sufficient resources. Second, they rest on the malleability of hard and soft power instruments (Gallarotti 2015: 254). Are they open to deliberative management and deployment in the way that some accounts suggest? What are the implications of this for the BDN and other policies aimed at countering the BRI? If the United States is considered, fiscal resources have been under severe strain, particularly during periods when the federal government budget has been a basis for political mobilization by the conservative right and groupings such as the Tea Party movement. The resources assigned to the BDN and other efforts to counter the BRI have thus been minimal. On top of this, the different forms of power deployed through, for example, the BDN are unlikely to be particularly malleable. Arguably, they have different logics that follow their own sequencing patterns and cannot be easily welded together. Even in illiberal countries, the use of power across the state and civil society generally defies tight or centralized coordination. Calibration is not a possibility. Within the BDN, there is a mis-

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match between, on the one hand, the initiative’s soft power narrative that seems to rest on a transformative narrative promising a connectivity revolution and, on the other hand, its hard power capacities to change the calculi informing and structuring investment decisions. Even with BDN certification, the promises of greater returns will remain, given the long-term character of high-quality infrastructure as an investment, uncertain in terms of returns. The overall goal of the BDN is to facilitate or leverage private sector funding for infrastructural projects. Certification and rankings may, however, be able to do relatively little to compensate for market risks and increase the projected returns for firms considering infrastructural investments. Furthermore, the ability of countries to take on loans, service debt, and pay back capital will be in large part a function of economic growth (Borton 2020). In sum, there is a lack of economic muscle and, thus, a mismatch between ambition and capacity. The consequences of infrastructure projects and other forms of development aid cannot be anticipated with certainty (Rawnsley 2016: 20). Put another way, policy outcomes may very well differ markedly from initial policy intentions. Projects “certified” by the BDN would probably win backing within some national and regional elites, but the logic of the BDN in rewarding some infrastructure projects while implicitly disparaging others may trigger resentments and fractures within elites or among the wider population. It might also be that seemingly foreign efforts to vet infrastructure projects will trigger nationalist sentiments or some other form of backlash. A study of aid projects in Afghanistan found that economic power not only was ineffective in terms of bolstering fragile state mechanisms, but also rebounded on the donors: “By disturbing local political balances and stimulating corruption, large aid projects often generated jealousy, conflict, and resentment among local groups” (Kelley and Simmons 2015: 55).

Summary The literature assessing the impact of rankings and certification initiatives suggests that the BDN has, as its backers claim, the opportunity and the capacity to restructure the character of infrastructural provision. Nonetheless, studies of economic power, an amalgam of hard and soft power, point toward a rather different conclusion. Despite claims that these forms of power can be combined effectively to create smart power, such amalgams generally resist centralized management and direction. This puts a question mark against the BDN’s prospects. In the following chapter, I scrutinize other initiatives, particularly those spanning the Indo-Pacific, that were at least in part structured around infrastructural development and countering the BRI.

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Note 1. It has also been noted that language, which is generally regarded as a principal soft power tool and customarily contrasted with the use of physical force, is an amalgam and can in itself be coercive in certain settings and contexts (Cross 2011: 693).

6 Reconfiguring the Indo-Pacific

Alongside initiatives such as the Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act), Prosper Africa, and the Blue Dot Network (BDN), the United States was drawn toward processes of institutional creation and processes of what can be termed “institution bolstering” across the Indo-Pacific. It worked with, and through, regional allies and partners. For the most part, the institutions had a security dimension, but also infrastructure and connectivity dimensions that took shape within a context very largely structured by the Belt and Road Initiative (BRI).

Trump’s Election Victory and Asia Like many others, US allies and partners across Asia did not take Donald Trump’s prospects of victory in the 2016 presidential election particularly seriously. Nonetheless, even at the time of the early Republican primaries when he was leading but not certain of winning the nomination, there were some concerns about his strident opposition to the Trans-Pacific Partnership (TPP), the trade agreement championed by the then Japanese prime minister Shinzo Abe. While at that point there was a belief in Tokyo that the USJapanese security relationship was institutionally resilient, Trump’s campaign speeches and his long track record in criticizing the “unfair” trade practices of allies were certainly noted with a degree of concern in that they seemed to reflect the prevailing mood (Harding 2016). Trump was, of course, restating claims that he had made over decades. He had criticized Japan and South Korea, as well as countries in Europe

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and the Middle East, from the 1980s onward for their use of industrial policy to support targeted sectors of their economies. Japan was thus, Trump asserted, predatory and protectionist (Miller 2018). Furthermore, it obstructed market access by US firms. As he told Oprah Winfrey, “If you ever go to Japan right now, and try and sell something, forget about it, Oprah. Just forget about it. . . . They come over here, they sell their cars, their VCRs, they knock the hell out of our companies” (Tankersley and Landler 2019). Although at that point Trump was seen as likely to lose, protectionist rhetoric appeared to be reshaping the US political mainstream as Hillary Clinton’s abandonment of the TPP, which she had initially championed, seemed to confirm. Alongside trade questions such as these, the Trump campaign struck out at the United States’ Asian allies in another way. While Japan and South Korea had long played a pivotal role in terms of US forward military projection, Trump argued they had, like the Europeans, been freeloaders when it came to their own defense and security needs. In the first presidential debate with Hillary Clinton, Trump asserted: “We defend countries. They do not pay us what they should be paying us because we are providing a tremendous service and we’re losing a fortune” (Hu, 2016). This insistence on a reconfiguration of security relationships extended at times to the prospect of nuclear proliferation. Asked on Fox News if Japan should acquire nuclear weaponry, Trump replied: “It’s not like, gee whiz, nobody has them. So, North Korea has nukes. Japan has a problem with that. I mean, they have a big problem with that. Maybe they would in fact be better off if they defend themselves from North Korea. . . . Including with nukes, yes, including with nukes” (LoBianco 2016). Although Abe energetically sought to court Trump in the immediate aftermath of his election victory, the incoming president nonetheless cancelled US participation in the TPP within days of taking office. Then, in 2018, the Trump administration used Section 232 of the Trade Expansion Act of 1962, which permits the imposition of tariffs if US “national security” is threatened, to impose tariffs on steel and aluminum imports from a number of countries, including Japan (Williams 2022).1 The tariffs on South Korean steel were waived, but only once Seoul had agreed on annual import quotas in their place (Yonhap News Agency 2022). All this was compounded by the uncertainties that arose from the difficulties that there were in discerning the overall trajectory of the Trump administration. There were exceptional challenges when it came to the White House’s dramatically shifting relationship with North Korea and Chairman Kim Jong Un as it swung between seeming threats of a nuclear assault to personal diplomacy. If anything, US allies and partners in the Pacific region were even more unsettled by the forty-fifth president than those in Europe.

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Changing Tack Nonetheless, despite the Trump administration’s apparent disdain for traditional allies as well as its repudiation of the TPP, the turn against China in late 2017 created logics and sequential chains that drew the United States back toward Asia and multilateral cooperation. By November 2019, Secretary of State Mike Pompeo could proclaim that “President Donald J. Trump has made US engagement in the Indo-Pacific region a top priority of his Administration” (US Department of State 2019: 4). Within this context, the United States participated in a number of initiatives that sought to counter the BRI and China across a range of fronts.

The Free and Open Indo-Pacific The Free and Open Indo-Pacific (FOIP) was initially pioneered by Japan and tied to the proposed “Arc of Freedom and Prosperity.” It appeared during the first of Abe’s governments (2006–2007) and was then resurrected by him in August 2016 at the sixth Tokyo International Conference on African Development (TICAD VI). Abe stressed Japan’s pivotal role in this: “Japan bears the responsibility of fostering the confluence of the Pacific and Indian Oceans and of Asia and Africa into a place that values freedom, the rule of law, and the market economy, free from force or coercion, and making it prosperous” (Ministry of Economy, Trade and Industry 2021). FOIP has, however, been justly described as “an amorphous concept” (Hosoya 2019: 19; Miyake 2019). Certainly, the three pillars on which it rested lacked precise definition. These were security, economic development, and stability, respectively. Security was tied to the rule of law and freedom of navigation across the region. Economic development was based on improvements in connectivity and commitments to trade and investment liberalization. Stability had, like the first pillar, direct strategic implications through, for example, capacity building in processes of maritime law enforcement (Ministry of Economy, Trade and Industry 2021). The third FOIP pillar did, however, also include a promise of regional “connectivity” and this was backed by specific initiatives. In May 2015, even before the formal relaunch of FOIP, Japan established a $110 billion Partnership for Quality Infrastructure (PQI). This later became, in May 2016, the Expanded Partnership for Quality Infrastructure (EPQI) and was given a budget of $200 billion. These initiatives, which were backed by the Asian Development Bank (ADB), were to fund infrastructure projects across the Indo-Pacific during the period between 2017 and 2021 (European Parliament 2021: 6; Kutty and Basrur 2021; L. Patey 2021: 124). Japanese firms were at the forefront and, for example, engaged in the development of

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Mombasa Port (Kenya), the Colombo West Container Terminal (Sri Lanka), and Bangladesh’s first deep-sea port in Matarbari (Hellenic Shipping News 2020; S. Roy 2021; Financial Express 2022). The incorporation of connectivity and infrastructural development within FOIP highlights the importance Japan had long attached to the complementarities between strategic and economic security. At first sight, this was not a vision that would have had a particular lure for the Trump administration given the president’s faith in hard power and his earlier disdain for nation building. Nonetheless, the United States required others to join with it in countering China. Japan had, however, a first mover advantage and this played a pivotal role in shaping the terms and conditions on which FOIP took shape and developed. Furthermore, because Washington increasingly saw the BRI as a core component of Chinese grand strategy, connectivity and infrastructure moved up the policy agenda. There was not, however, full policy convergence between Japan and the United States when it came to FOIP. US strategy for the region, as laid out in the December 2017 National Security Strategy, was structured around China, which the strategy asserted was seeking “to displace the United States in the Indo-Pacific region, expand the reaches of its statedriven economic model, and reorder the region in its favor” (President of the United States 2017: 25). On this basis, the strategy asserted that the United States would “compete with all tools of national power to ensure that regions of the world are not dominated by one power . . . work with our partners to contest China’s unfair trade and economic practices and restrict its acquisition of sensitive technologies . . . [and] . . . help South Asian nations maintain their sovereignty as China increases its influence in the region” (President of the United States 2017: 50). It would also provide the countries of Africa with “an alternative to China’s often extractive economic footprint on the continent” (President of the United States 2017: 53). In contrast, Japan made forceful efforts to ensure that FOIP was not framed as a strategy designed to counter the BRI or Beijing. It would not, at least in public, commit itself to a zero-sum understanding of competition with China (Hosoya 2019: 18–28). Instead, Tokyo framed its commitment to connectivity and infrastructure in terms of public goods that would, when taken together with broader economic development, bolster human and social capital. Japan also embraced the term nation building that had, particularly in the wake of developments in Afghanistan and Iraq, become discredited in Washington: “Japan will expand infrastructure development, trade and investment, and enhance business environment and human development from East Asia as a starting point, to the Middle East and Africa. In addition, Japan will provide nation-building support in the area of development as well as politics and governance, in a way that respects the owner-

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ship of African countries, and not by forcing on or intervening in them” (Ministry of Foreign Affairs of Japan 2017). Japan’s framing of FOIP’s infrastructure development commitment also used the concept of quality in a markedly different way than the United States. While the Trump administration sought to use the word quality to draw a direct and open distinction between the BRI and infrastructural provision provided under the auspices of FOIP or the West, Japan purposively talked in much looser and less accusatory terms (Ministry of Economy, Trade and Industry 2021). How did Japan define quality infrastructure? Successive Japanese governments cited the Ise-Shima Principles that defined “quality infrastructure investment” in terms of projects resting on economic efficiency, safety, resilience against natural disasters, and the consideration of environmental and social considerations, while at the same time contributing to local societies and economies. These were endorsed by the Group of 7 (G7) in June 2016 (Kajikawa n.d.). They secured further backing when, with Japan in the chair, the Group of 20 (G-20) Principles on Quality Infrastructure Investment were agreed on at the 2019 G-20 Osaka summit (Ministry of Economy, Trade and Industry 2021). There was a further element in Japan’s framing of FOIP and the strategy that Tokyo pursued in responding to the BRI. While sometimes referring to potential complementarities, Japan did not initially participate. In 2017, however, it shifted to a policy of what has been called “conditional engagement” (European Parliament 2021: 6). On this basis, Tokyo sent a delegation to China’s Belt and Road Forum (S. A. Smith 2021). There have also been instances of cooperation between Japan and China such as the construction of the Jakarta-Bandung railway in Indonesia (Hosoya 2019: 24).

Bridging the Divide While there were important differences between Japan and the United States in terms of tone, framing, and strategy, it would nonetheless be a mistake to exaggerate the scale of the divide between their approaches. Despite the references to cooperation with the BRI, and the refusal to criticize it in direct and open terms, it was difficult to disguise the extent to which the Japanese projects and initiatives constituted an inherent challenge to Chinese infrastructural ambitions. Certainly, Beijing understood them in this way. Aside from the implicit contrast to the BRI offered by the word quality, and the principles on which such quality rested, Japanese infrastructure investments appear to have been concentrated in countries and areas of strategic, or at least potentially strategic, significance where there were concerns about Chinese efforts. According to one group of observers,

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Furthermore, FOIP was not just an economic concept. It also had hard power strategic implications. The references in the first and third pillars to maritime law enforcement and the rule of law were widely understood as being targeted at Chinese forces in the East and South China Seas and anxieties about the Chinese presence in the Indian Ocean (Zhao 2019: 384). In May 2018, in a seeming embrace of FOIP’s strategic potential, it was announced that the US Pacific Command would be renamed the IndoPacific Command (Congressional Research Service 2018: 14). On top of this, the words free and open conveyed a critique of China in themselves. In a July 2018 speech, Secretary of State Pompeo used these two words to full effect, spelling out that “free” meant “good governance and the assurance that citizens can enjoy their fundamental rights and liberties” and “open” rested on “open access to seas and airways” as well as “fair and reciprocal trade, open investment environments, transparent agreements between nations, and improved connectivity to drive regional ties” (Congressional Research Service 2018: 11).

Processes of Institutionalization FOIP was a concept that laid a potential basis for institutional development. It was not, however, an institution or a cluster of institutions and, while its defining features pointed toward a trajectory, it did not itself even constitute a strategy. Having said this, there were some attempts to develop strategies and, through institution building, to operationalize FOIP. Although the targets were, as so often before, generally unacknowledged, all these efforts had China and the BRI in their sights. The Quadrilateral Security Dialogue (Quad), involving Australia, India, Japan, and the United States, had originally been formed in response to the 2004 Boxing Day earthquake and tsunami in the Indian Ocean. It then met on the sidelines of the Association of Southeast Asian Nations (ASEAN) Regional Forum in May 2007 and also held joint naval exercises (Straits Times 2018). The withdrawal of Australia, which had become concerned about the ways in which the Quad would be perceived in Beijing, led to a decade-long pause in Quad activities, but a process of resurrection began following meetings that brought

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together the four nations in November 2017 and then in June 2018 when senior officials met in Manila (Congressional Research Service 2018: 13). At this point, different anxieties about China from across the region began to fuse. Furthermore, for its part, Japan also wanted to ensure that, despite their anxieties about the Trump administration, and in particular its level of commitment to Asia, the United States would remain in a leadership role (Congressional Research Service 2018: 21). India

Within this context, and as the embrace of the term Indo-Pacific suggests, India was increasingly seen as pivotal: “It is a nation that can bookend and anchor the free and open order in the Indo-Pacific region, and it’s our policy to ensure that India does play that role, does become over time a more influential player in the region” (Congressional Research Service 2018: 4).2 This was, in itself, far from being a policy departure. India had almost always figured in the United States’ foreign policy calculi and, notwithstanding its commitment to strategic autonomy, had closer relationships with the United States, particularly since the ten-year defense pact and civil nuclear deal were concluded in 2005. This is because of its geopolitical weight across the region and the long-standing strains between Beijing and New Delhi that led to the 1962 Sino-Indian war and later military skirmishes.3 The existing strains were compounded by the BRI. The initiative not only was seen as Chinese aggrandizement but, viewed from New Delhi, the China-Pakistan Economic Corridor (CPEC) that formed part of the BRI infringed Indian sovereignty by crossing Pakistan-occupied Kashmir. BRI infrastructure projects in Sri Lanka and the Maldives appeared to pose a further threat. At the same time, for both Narendra Modi’s government and the Trump administration, there seemed to be signs of a strategic and political coalescence. The Trump administration made India a Major Defense Partner and elevated the countries’ bilateral ties to a “comprehensive global strategic partnership” (Mishra 2020). Nonetheless, despite Washington’s efforts and the ever present strains between New Delhi and Beijing, India has limited capacities. Its economy has become increasingly dependent, through direct investment, on China. Furthermore, India has been drawn into Chinese-backed multilateral networks, most notably the Shanghai Cooperation Organisation (SCO) (Paik and Park 2021: 48). This together with the country’s relationship with Russia necessarily imposed limits on India’s ability to break with its history of nonalignment or engage more fully with Western-led initiatives. Efforts to incorporate India within the regional architecture were further frustrated by its protectionist leanings. It stayed out of the Regional Comprehensive Economic Partnership (S. Gupta and Ganguly 2020; Medcalf 2020: 192).

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In sum, India was not prepared to become what could be understood as a proxy for the United States (Chaudhury 2019). Furthermore, Washington and many in New Delhi fear the possibility of entrapment in that close relationships can pull countries into regional conflicts involving the other country (J. M. Smith 2020). There were also long-standing suspicions of the United States among policy elites (Joshi 2021: 151). Furthermore, India was at some distance from the United States as well as countries such as Australia and Japan when it came to the promotion of democratic rights and its stance toward foreign policy flash points such as North Korea and Ukraine. India thus pursued a hedging strategy whereby it held back from picking a side and retained some freedom of maneuver. At times, it held back from pronounced forms of opposition to Beijing, and its dealings with China incorporated both cooperative and confrontational elements (Joshi 2021: 122). India also pursued its own initiatives and was ready to engage in limited coordination with other nations. It promoted Act East (formerly Look East), an initiative focusing on the development of connectivity infrastructures and transportation routes through Northeast India and across neighboring transnational regions aimed at building closer economic connections between India and Afghanistan, Bangladesh, and across Southeast Asia and Africa (Barua 2020: 103; Brînză 2018; US Department of State 2019: 9). At the same time, India also sought to develop westward connectivity. Together with Abe, Modi announced the establishment of an AsiaAfrica Growth Corridor (AAGC) in May 2017 at the same time as the Belt and Road Forum was meeting in Beijing (India did not participate). The AAGC promised “quality infrastructure” and capacity building as well as “digital and regulatory connectivity” to “integrate Africa by establishing strategic linkages with other regions” (Panda 2017: 2; Palit and Sano 2018; Brînză 2018). There were other projects. The multimodal International North-South Transport Corridor (INSTC) inaugurated in 2018 provides connectivity among India, Russia, and northern Europe while circumventing Pakistan and China. India also joined the Ashgabat Agreement and has sought to establish an international multimodal transport and transit corridor between Central Asia and the Gulf (European Parliament 2021: 6). India was, however, much more cautious about multilateral initiatives. It did not join the Trilateral Infrastructure Working Group (Chaudhury 2018; Muni and Mishra 2019: 231). It also framed its commitment to infrastructural development in terms that distanced India from US strategies. As Modi told the June 2018 Shangri-La Dialogue in a formulation that is illustrative of his approach: “We must not only build infrastructure, we must also build bridges of trust . . . these initiatives . . . must promote trade, not strategic competition” (J. M. Smith 2018b). He added that India never viewed the region as “a strategy or as a club of limited members” (Chaudhury 2018).

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Australia

Although Australia has historically been a core ally and is a member of the Five Eyes intelligence-sharing network, it concluded a free-trade agreement with China in 2015 after a decade of negotiations (Camroux 2021). Even before then, trading relations had broadened and deepened as China became Australia’s largest single two-way trading partner. By 2020, Chinese investment in Australia accounted for about 4 percent of its total foreign direct investment (FDI), and Australia became an important destination for Chinese tourists and students (Australian Government, Department of Foreign Affairs and Trade 2021a). In contrast with the United States, Australia had a trade surplus with China (driven by iron ore exports), although this in itself threatened to create vulnerabilities in that the granting of access to Chinese markets could be used by Beijing to secure political leverage (Australian Government, Department of Foreign Affairs and Trade 2021b). Against this background, Australia became what has been described as an unofficial BRI partner in 2016 with the creation of the AustraliaChina One Belt One Road Initiative (ACOBORI), a public-private nongovernmental organization (NGO). During the following year Australia rejected an offer to participate more formally, but six months later the minister for trade signed a Memorandum of Understanding (MoU) on behalf of the country around investment and infrastructure “that can include Belt and Road projects” (Australian Centre on China in the World 2019). There was, however, an added qualification that cooperation would be limited to investment and infrastructure in third countries and, as a corollary, not within Australia itself (Chung and Mascitelli 2019; Laurenceson and Golley 2022). Developments then moved to a subnational level. In October 2018, the state of Victoria signed an MoU that was followed by a BRI Framework Agreement a year later. As well as infrastructural development, it envisaged cooperation spanning trade and finance. The agreement also looked ahead to building relationships spanning manufacturing, biotechnology, and agriculture (Callanan 2021). This, however, triggered a policy shift as the Canberra government sought to rein in and manage Australia’s relationship with China. It took action against Victoria’s participation in the BRI. Prime Minister Scott Morrison put forward “foreign interference” legislation giving the foreign minister the power to review arrangements between state governments (including agencies, local governments, and universities) and foreign governments (Chung and Mascitelli 2019: 18). On the basis of a review, in April 2021 the foreign minister ordered the dissolution of Victoria’s BRI agreement, concluding that it was “inconsistent with Australia’s foreign policy or adverse to our foreign relations” (Varano 2021). The key lesson,

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at least for the Australian government as well as for observers in Europe and the Americas, was that trade with China or investment might be weaponized by Beijing at any point. Australia was in this sense one of the “canaries in the coalmine” (Strategic Comments 2020: v). The move by the Canberra government against the BRI took place within the context of a much broader strategic shift. Australia called on China to abide by the 2016 Permanent Court of Arbitration decision in the South China Sea dispute. A 2017 Foreign Policy White Paper suggested that China was actively undermining the rules-based order. Australia was the first nation to exclude Huawei from involvement in its fifth-generation (5G) network (Lee 2020: 14–15). The breaking point appears to have been Australia’s backing for a UN inquiry into the origins of Covid-19. Ministerial contacts were cut off and tariffs were imposed on Australian wine, barley, beef, coal, timber, cotton, and seafood in breach of the 2015 free-trade agreement. Furthermore, Chinese students were deterred from enrolling at Australian universities and there were, reportedly, cyberattacks. Australia also had concerns about China’s growing influence in the South Pacific islands such as Vanuatu, which was heavily indebted to Beijing (Patey 2021: 124–125). Against this background, in November 2018 Prime Minister Morrison announced the Pacific Step-up (PSU) and pledged to establish a “new chapter in relations with our Pacific family” (Shoebridge 2021). PSU incorporated the development of security partnerships, but also included a $2 billion infrastructure partnership fund with Japan and the United States to support electrification and undersea cable initiatives, among other projects (Bisley et al. 2022: 148; Shoebridge 2021). The Australian Infrastructure Financing Facility for the Pacific partnered with the US Infrastructure Transaction and Assistance Network and put forward further plans for infrastructural investment in the Pacific Island nations (Vijaya 2021; Lee 2020: 14–15).4 Despite these initiatives, critical commentators have, however, noted that the Pacific Island nations saw the impact of climate change, rather than China, as their principal policy challenge and Australia was widely seen as a laggard so far as global warming was concerned. Indeed, it has been noted that Australia alone has added much more to global carbon dioxide (CO2) emissions than the Pacific region in total (Bisley et al. 2022: 149). The Quad, the Trilateral Partnership, and Other Initiatives Beijing was quick to see the Quad, which brought together the United States, India, Japan, and Australia and had reemerged in 2017, as a protoalliance and a form of containment. Nonetheless, despite fears that the Quad had strategic ambitions, it also pledged itself, through the creation of work-

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ing groups, to make coordinated efforts around vaccine provision, critical and emerging technologies, and climate change. It later added space and cybersecurity to this list and formalized its earlier commitment to infrastructural development (Curtis et al. 2022: 1). In making the commitment to infrastructural projects, the Quad was seen as challenging the BRI. Indeed, at times, participant nations framed it in this way. In October 2017, Alice Wells, US acting assistant secretary for South and Central Asian affairs, described the Quad in terms of values and connectivity. Nonetheless, the message to China was barely hidden. The Quad was, she asserted, “providing an alternative to countries in the region who are seeking needed investment in their infrastructure.” Those countries would thereby have “alternatives that don’t include predatory financing or unsustainable debt” (Congressional Research Service 2018: 13). Having said this, the prospects for the Quad were always uncertain. Relations with ASEAN were sometimes strained, and the omission of South Korea raised questions. Despite its opposition to the BRI and its record as an infrastructure provider, India was, as noted above, guarded about participation. Indeed, India has been described as “the weakest link among the Quad participants” (Paik and Park 2021: 48). Other initiatives therefore came to the fore and, as shown below, the Quad was to be reconfigured. In August 2018, the Japan Bank for International Cooperation (JBIC), the US Overseas Private Investment Corporation (OPIC), and Australia’s Department of Foreign Affairs and Trade announced the creation of the Trilateral Partnership for Infrastructure Investment in the Indo-Pacific. Its stated purpose was to construct infrastructure, facilitate economic growth, bolster connectivity, and address development challenges across countries in the Indo-Pacific region (Chaudhury 2018; Qiu 2021; Tagliapietra 2021).5 There were, however, challenges in coordinating the efforts of each country’s various government agencies, and the partnership suffered from a lack of corporate partners (J. E. Hillman 2021b). Several initiatives were announced in November 2018, including the building of an expanded electrical grid in the South Pacific and a liquefied natural gas project for Papua New Guinea (Paik and Park 2021: 44). It was, however, noted in 2021 that the first and only project initiated under the partnership was a subsea fiber optic cable spur to Republic of Palau (J. E. Hillman 2021a). In sum, it seemed by then that the partnership had failed to shift the character of the risk calculus faced by firms considering large-scale infrastructural investments (Channer 2021a, 2021b). By the time the Joe Biden administration had taken office, there was a recognition that if the Quad was to serve a purpose, and particularly if India was to be engaged, it had to pull back from the strategic ambitions that had allowed some Western commentators to describe it as the beginnings of an Asian NATO.6 When speaking in Mumbai, Biden’s deputy secretary of state

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Wendy Sherman stressed nonmilitary forms of security: “The Quad is [a] vehicle which largely operates in security realms that are non-military, nondefence. Things we do together on vaccines, and infrastructure, supply chains, technology, and climate—all the forward-thinking areas in which we need to gain confidence and ensure security for our people” (Haidar 2021). Furthermore, the Quad’s membership and structures continued to be loose and largely undefined. As one commentator noted, “So, at any point, any partner could decide to walk away. . . . But equally, that makes it flexible— others could be invited and the agenda is not fixed” (Power 2021). Arguably, the formation of AUKUS (Australia, the United Kingdom, and the United States), the trilateral security pact bringing together the three nations, which was announced in September 2021, stemmed in part from a growing realization that the Quad would focus largely on a developmental agenda and was unlikely to become fully institutionalized (Haidar 2021).7 Other, often overlapping, initiatives were also pursued.8 Using MoUs, the US Treasury initiated bilateral framework agreements to “Strengthen Infrastructure Finance and Market Building Cooperation” with different countries, including Japan, Korea, Thailand, and Vietnam. These agreements were designed to generate private sector finance across the region and thus lay a basis for market-based infrastructural development (Office of the Spokesperson 2020; US Department of the Treasury 2019). There was also an increased focus on the Pacific Islands that extended beyond Australian initiatives. For its part, China offered assistance with infrastructural projects and appeared to share the island nations’ concerns about the consequences of climate change. At the same time, the islands were also becoming significant Chinese trading partners. In 2017, China’s trade with the Pacific islands reached $8.2 billion, a figure nearly five times that of their trade with the United States and about twice the 2015 figure (Akimoto 2019: 4). Nonetheless, United States government representatives, including Vice President Mike Pence, continued to emphasize the importance of counterinitiatives. The efforts of the Trilateral Partnership for Infrastructure Investment in the Indo-Pacific were complemented by broader projects. A five-nation partnership that included New Zealand collaborated in building a $1.7 billion electricity grid in Papua New Guinea (Stilwell 2020). There were also efforts, for example, in both Fiji and Kiribati in association with Japanese projects and Australia’s Pacific Step-up plan.

The Indo-Pacific Business Forum Although its activities were to be disrupted by the Covid-19 pandemic, the Indo-Pacific Business Forum (IPBF) went some way toward providing a

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forum within which dialogues could take place. Indeed, some of the regional initiatives that have been charted were first announced at the IPBF. While the IPBF emphasized the ASEAN nations, it was geographically broader than the Asia-Pacific Economic Cooperation (APEC) forum, which excluded India from membership because it was not a Pacific power. Furthermore, the US government, alongside US corporations, had a visible leadership role. The IPBF was also purposively shaped to counter the BRI and China. Indeed, this was explicitly stated: “The IPBF supports and extends our Indo-Pacific strategy, as one important tool to make our economic case to the region for the transparent, private sector–driven model we promote. . . . This model provides a clear and compelling alternative to the PRC’s state-led approach to development that all too often leaves countries in the Indo-Pacific region saddled with unsustainable debt and vulnerable to political and economic pressure” (Stilwell 2020). At the first meeting of the APEC forum, held in July 2018, Secretary of State Pompeo announced funding for infrastructure and connectivity projects worth $113 million and the launch of the Digital Connectivity and Cybersecurity Partnership (DCCP) to extend internet provision and the Asia Enhancing Development and Growth through Energy (Asia EDGE) to develop further energy projects (European Parliament 2021: 6). The Trump administration continued to make efforts to build up the IPBF and bolster its presence across the region. Three US cabinet officials spoke at the third Indo-Pacific Business Forum held in 2020—Secretary of State Pompeo, Secretary of Commerce Wilbur Ross, and Energy Secretary Dan Brouillette—and it was attended (albeit online) by fifteen US ambassadors and chiefs of mission. There were also representatives from a diverse range of US federal departments and agencies, including the US Trade and Development Agency, the US Agency for International Development (USAID), and the Treasury Department. Large corporations from the new technology sector, manufacturing, and financial services including Google, Ford, and Mastercard, as well as the US Chamber of Commerce, were in attendance. The IPBF’s stated purposes extended far beyond infrastructure. It was “to promote trade, investment and economic cooperation between the United States and its partners throughout the Indo-Pacific region” (IndoPacific Business Forum 2021). Although the IPBF appears to have given relatively little attention to multilateral efforts aside from the Blue Dot Network, which had been announced at the 2019 forum, it nevertheless promoted the contribution made by the Infrastructure Transaction and Assistance Network (ITAN), the US government agency within the International Trade Administration (ITA) that draws on representatives from fourteen US government agencies. ITAN recorded that it had backed projects with a combined market value of over $175 billion and that these projects spanned

100 Countering China the Indo-Pacific. ITAN cited, in particular, its efforts in Bangladesh, India, Vietnam, Laos, Indonesia, the Philippines, and Thailand (Office of the Spokesperson 2020).

Biden, the BRI, and the Indo-Pacific By the time Trump resentfully left office in January 2021, there was a plethora of multilateral initiatives across the Indo-Pacific, many of which had an infrastructural development component. Important statements of intent had been issued. Furthermore, the United States, Japan, Australia, and India (the four nations that collectively constituted the Quad) had among them delivered projects amounting to more than $48 billion in funding between 2015 and September 2021 (J. E. Hillman 2021a). Against this background, in September 2021, President Biden hosted Scott Morrison, Narendra Modi, and Yoshihide Suga at the White House for the first-ever in-person Leaders’ Summit of the Quad. Although the statement that was issued addressed pandemic and vaccine access, climate change, emerging technologies, space, and cybersecurity, “high-standards infrastructure” also had an important place on the agenda. It maintained a broad understanding of “infrastructure” that would be focused on digital connectivity, climate, health and health security, and gender equality infrastructure. The statement then pledged that “the Quad will rally expertise, capacity, and influence to strengthen ongoing infrastructure initiatives in the region and identify new opportunities to meet the needs there” (White House 2021d). The planned partnership, it was said, would take a lead in the construction of quality infrastructure in the Indo-Pacific region. The gathering added a degree of institutionalization to this statement of intent by announcing the launch of the Quad Infrastructure Coordination Group that would “meet regularly to share assessments of regional infrastructure needs and coordinate respective approaches to deliver transparent, high-standards infrastructure” (White House 2021d).

Underinstitutionalization of Initiatives There was, by January 2021, a large patchwork of initiatives and projects engaging the efforts of agencies across much of the federal government. Some had a multilateral character, while others were bilateral. Some were sporadic, while others had a more sustained existence. Some had a fixed composition or membership, and others were more fluid. The multilateral initiatives were, however, underinstitutionalized in that there were few mechanisms and processes by which intentions could

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be operationalized. Structured arrangements appear to have been few and far between. The Quad had its first ministerial-level meeting in September 2019 (Stilwell 2020). This was, however, an exception rather than the rule. In sum “there was no mechanism identified for deepening cooperation in this important area” (J. E. Hillman 2021a). A commentary on the Quad published by the Lowy Institute in Australia also pointed to slow progress “since being articulated by leaders with much fanfare at the beginning of the year” and drew much the same conclusion: “without an institutional mechanism, such as a secretariat, to support and direct the proceedings and aims, the Quad could easily slip from a leadership-level event to a downgraded dialogue forum” (Kachiar and Poojary 2021). Josh Rogin, a seasoned commentator, went further: “While the region welcomes the aspirations of the Indo-Pacific strategy as a sign of broader strategy and regional engagement, the challenge right now is that it’s just aspirational—a set of goals with no real strategy, policy enumeration or implantation plan, let alone resourcing and budget” (2018).9

Summary This chapter has surveyed the US-led efforts to develop infrastructural provision across the Indo-Pacific region and efforts to coordinate US efforts with those made by Japan, India, and Australia. It has suggested that although the embedding of the term Indo-Pacific and initiatives such as the Quad secured considerable attention, they were assigned only limited resources. On top of this, President Trump’s pursuit of trade conflicts with US allies, his seeming equivocation about security arrangements, and the courting of Chairman Kim Jong Un undercut US credibility as a regional leader and facilitator. Furthermore, the initiatives remained underinstitutionalized in a weakly institutionalized region and were held back further by the hedging strategies of many Asian nations that were reluctant to take sides between Washington and Beijing. In the following chapter, I contemplate the efforts of the Trump and Biden administrations to encourage European countries to join forces with the United States and to take a more assertive stand against the BRI and Chinese ambitions.

Notes 1. In 2022, the Joe Biden administration concluded a deal with Japan suspending the levies on steel imports, although a 10 percent tariff on aluminum remained (Williams 2022). 2. The importance of India for the Donald Trump administration was bolstered by electoral considerations as the president sought to expand his base among Indian

102 Countering China Americans. Fifty thousand reportedly attended a “Howdy Modi” rally in Houston (September 2019) featuring both Trump and Narendra Modi (Paul 2019). It should be added that countries such as Sri Lanka, the Maldives, and Nepal look to India for leadership (Patey 2021: 124). 3. India was, however, ready to join other Chinese-led initiatives. It was a participant in the Asian Infrastructure Investment Bank (AIIB) and the Shanghai Cooperation Organisation (Sachdeva 2018). 4. Australia followed this with moves to establish the Australia-India Infrastructure Forum to bring Australian finance together with the wealth of infrastructure opportunities in India (Singh 2022). 5. India’s hesitation in embracing strategies and projects that would be understood in Beijing as an assault on China and Chinese interests was widely shared across the Asian region and is considered further in Chapter 9. 6. The Biden administration published the Indo-Pacific Economic Framework in October 2021 at the East Asia Summit. That framework would, the White House said, “define our shared objectives around trade facilitation, standards for the digital economy and technology, supply chain resiliency, decarbonization and clean energy, infrastructure, worker standards, and other areas of shared interest” (Goodman and Reinsch 2022: 1). Some of these would not have been included in a list compiled by the preceding administration, but there were few radical policy departures. 7. For its part Beijing claimed that the Quad would be short-lived, describing it as transitory “sea foam” (Power 2021). 8. Other measures were also there in the background. The Asia Reassurance Initiative Act (ARIA) of 2018 was passed by Congress on a bipartisan basis to “develop and commit to a long-term strategic vision and a comprehensive, multifaceted, and principled United States policy for the Indo-Pacific.” It emphasized the importance of ties and alliances (Prince 2019). In July 2018, Asia EDGE was established to develop and expand an energy infrastructure across the region and “foster regional energy connectivity” (USAID 2021). 9. Nonetheless, although US-led efforts were underinstitutionalized, they still were sufficient to provoke concerns threatening a further fragmentation of development efforts. The emphasis on Australia, India, and Japan triggered anxieties that ASEAN was being neglected (Congressional Research Service 2018).

7 Nudging Europe

The United States endeavored to draw the European nations into taking a more assertive policy stance toward China and, within this context, resist overtures from the Belt and Road Initiative (BRI) and its backers. Although such efforts had an impact, many of the European nations and European Union (EU) institutions tilted against Beijing largely for reasons of their own. Furthermore, despite a seeming alignment between the United States and much of Europe, there continued to be transatlantic differences in terms of the tones and approaches that were adopted. This chapter charts European responses to the BRI and considers the different ways in which US influence made itself felt. It considers efforts of the EU and individual countries. It gives particular attention to the United Kingdom, which had initially embraced the BRI in positive terms, as part of the “golden era” in Anglo-Chinese relations, before abruptly turning away from Beijing.

Background The strains in transatlantic relations during President Donald Trump’s term of office have been well charted. At a personal level, the leaders of the major European powers, most notably French president Emmanuel Macron, German chancellor Angela Merkel, and British prime minister Theresa May initially sought to court the US president and establish some sense of relational normality or basic cordiality but, in all three cases, this proved beyond their grasp. Of course, the strains can be attributed in part to Trump’s personality and his stubborn refusal to adhere to the conventions of diplomatic politesse.

103

104 Countering China However, Trump also brought issues to the fore—some of which were based on long-term but slow-burning differences of opinion between the United States and Europe—and placed them on the public agenda. This in itself was bound to strain transatlantic relations. Trade issues aside, Trump publicly railed about the defense spending levels of many European nations because they fell below 2 percent of gross domestic product (GDP). In 2020, estimates suggest that whereas the United States spent just over 3.7 percent of its GDP on defense, average expenditure for NATO’s European member states (and Canada) was only 1.77 percent (BBC News Reality Check Team 2021). In a more radical departure from precedent, Trump periodically questioned the value and purpose of NATO itself and, in particular, Article V of the NATO treaty that provided a guarantee of collective security. Insofar as collective security rests on an assured belief that countries will come to the aid of another member state, it was subject to growing doubt. On top of this, Trump’s unusually close and personal relationship with Russian president Vladimir Putin added to the sense across parts of the continent that Europe could no longer depend on the United States to serve as the guardian of the “free world.” Nevertheless, just as the Trump administration was compelled to try and synchronize its efforts with allies and partners across the Indo-Pacific, it also needed the engagement and backing of European governments and the EU if it was to credibly counter the BRI. The logic of strategic competition pulled Washington toward forms of diplomacy and multilateral initiatives that cut across the logic of America First.

The BRI and Europe Just as the European countries had moved to participate in the Asian Infrastructure Investment Bank (AIIB), much to the chagrin of Washington, there were early signs that the EU and certain individual member states might engage, in some cases fulsomely, with the BRI. In contrast with the United States and the Pacific powers, the EU did not, as an economic bloc largely focused on internal policy questions, appear to regard itself as having a vital interest in containing China: “It lacks the superpower status, the strategic stake and the political and military influence in Asia that lead many in the US to view China as a threat. It also has little to lose by trying to engage more deeply with China” (de Jonquières 2015: 3). These sentiments created the framework for the shaping and development of an EU infrastructure and connectivity policy. In September 2015, the Chinese government and the European Commission signed a Memorandum of Understanding (MoU) on the EU-China Connectivity Platform. This would, the Commission announced, “enhance synergies between China’s

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‘One Belt One Road’ initiative and the EU’s connectivity initiatives such as the Trans-European Transport Network policy. The Platform will promote cooperation in areas such as infrastructure, equipment, technologies and standards” (European Commission 2015). As the global context started to shift in character, there was a degree more caution when the May 2017 Belt and Road Forum was held in Beijing. The conference was attended by just one European head of state, Czech president Milos Zeman, and five heads of government (from Greece, Hungary, Italy, Poland, and Spain), as well as officials from Belgium, Estonia, and Germany (Duchâtel and Duplaix 2018: 6). While the EU delegation expressed backing for the BRI, there was significant conditionality. By this point, there were already open concerns about the character of some BRI projects: We support co-operation with China on its “One Belt, One Road” initiative on the basis of China fulfilling its declared aim of making it an open initiative which adheres to market rules, EU and international requirements and standards, and complements EU policies and projects, in order to deliver benefits for all parties concerned and in all the countries along the planned routes. (Ministerio de Asuntos Exteriores, Unión Europea y Cooperación 2017)

These concerns were reaffirmed by European Commission’s vicepresident for jobs, growth, investment, and competitiveness, Jyrki Katainen, when he spoke at the Belt and Road Forum. Katainen stressed that the BRI should be “based on market rules and international standards” and complement existing networks. It should also be structured around transparency and sustainability. Alongside this, he pressed the case for the BRI and others involved in connectivity projects to draw on the “wisdom of the multilateral banks,” a reference to fears that the BRI was institutionally overdependent on the Chinese policy banks (European External Action Service 2017).

Policy Fractures Despite different initiatives, there was no history within the EU of an overall strategic approach toward China that could be drawn on (Ntousas and Minas 2022: 3). In practice, despite the deepening of intra-EU structures and relationships, the locus of economic and foreign policymaking lay with the individual member states, some of which had pressing needs and were searching for sources of infrastructural investment. The policy of budget deficit reduction, pursued from 2010 onward as countries sought at the same time to recover from the Great Recession of 2008–2009, meant that there was little public funding for projects. Given this, the BRI was alluring. It was reported ahead of the 2017 Belt and Road Forum that, although

106 Countering China BRI investments had been largely directed toward East Asia and Eurasia, some European governments, particularly those hardest hit by economic retrenchment, were eager to engage with the BRI. In some instances, they had already established economic ties with China. Even before the forum was held, in 2016, it was estimated that more than $8 billion of Chinese funds had been invested in Central and Eastern Europe. Much of this was committed to sectors such as energy, telecommunications, and real estate. Furthermore, there was already growing connectivity between East Asia and Europe. Thirty-five Chinese cities had established trade and transportation links with European cities (Mohan 2018). In sum, the embrace of the BRI by certain European countries can be explained by the economic and social consequences of austerity, the structural economic difficulties that they faced, as well as a preexisting relationship with China. As a report about the 2017 Belt and Road Forum noted: “Member states in Central and Eastern Europe, as well as Greece, Portugal and Spain have mostly reacted enthusiastically to it. Given their own poor economies, these states have welcomed Chinese investment in large infrastructure projects, and they see Chinese investment as a way to boost their local economies and employment” (Ghiasy and Zhou 2017). The attraction of the BRI for nations in Eastern and southern Europe led to increasingly pronounced fractures between European countries. This was because attitudes toward the BRI were disinterested, or at times hostile, in much of the north and west. While, for example, some French firms and cities (most notably Lyon, where the first Belt and Road train connecting the city with Wuhan arrived in April 2016) sought to engage, President Macron spoke in February 2018 about the BRI in forthright terms that echoed the Trump administration. He stated that there could be no “one-way” trade road leading to “hegemony, which would transform those that they cross . . . into vassals” (Brattberg and Soula 2018). It was also reported that “the German and Dutch Governments do not want to engage too closely without a better understanding of the BRI’s long-term strategic implications (and) Nordic governments have so far not indicated much interest” (Ghiasy and Zhou 2017). German chancellor Merkel warned that the BRI was not being conducted “in the spirit of free trade” and she pointed to the growth of Chinese influence in the Balkans (Brattberg and Soula 2018). Greece, Italy, and Portugal

The financial crisis triggered a long period of economic and political instability across much of Europe. While countries struggled to recover from the recession, the EU’s commitment to “austerity” and fiscal rectitude meant that there were repeated demands for budget deficit reduction. This had signifi-

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cant implications for European infrastructural provision. It has been estimated that about 80 percent of the fall in infrastructure investment after 2008 was a function of reduced public spending by EU member states. Indeed, a decade after the crisis the European Investment Bank (EIB) warned that public investment in infrastructure was close to a twenty-five-year low (Jennifer Hillman and Tippett 2021). This had inevitable consequences for countries in southern as well as Eastern Europe, where infrastructural provision had long lagged behind that in other parts of the continent (Denmark 2020: 174). Greece was among the countries drawn toward the BRI. There had been severe tensions between Greece and other members of the eurozone, and it appeared likely at times that the country would be compelled to abandon the euro either temporarily or permanently. In these circumstances, after a prolonged period of turmoil culminating in the electoral victory of Syriza and its subsequent fracture, the Greek government recommitted itself to the fiscal retrenchment policies pursued by its predecessors. Against this background, in August 2016 the Chinese shipping firm COSCO purchased a majority stake in the port of Piraeus, Europe’s seventh biggest harbor.1 On the basis of this, Piraeus promised to become what was described as “a major stopover along the new Silk Roads” (OBOReurope 2018). Then, in August 2018 Greece formalized the relationship with the BRI by signing an MoU. There was later talk about rail connectivity and a canal connecting the Aegean Sea to the Danube to link Greece and the countries of Central Europe through the Balkans (Chrysopoulos 2022). For similar reasons, Italy was also pulled toward the BRI. While there had been thoughts of making Italy and ports such as Trieste gateways to both the East and central Europe for almost two decades, the country announced that it would become the first G7 member to sign up for the BRI. Improved connectivity offered significant economic advantages in itself, but also held out the promise of increasing Italian exports to China. There were also hopes of bilateral cooperation in sectors such as railways, airlines, space, and culture (Brattberg and Soula 2018). In March 2019, Giuseppe Conte’s coalition government (with a membership drawn in part from the rightist populist party, Lega, and the Five Star Movement) signed an MoU with Xi Jinping in Rome thereby “joining” the BRI, which although couched in loose terms and being nonbinding stressed the importance of existing forms of collaboration and looked to the future (Hong 2021: 1). While the MoU was, like many others largely symbolic, the investments by China’s Communications and Construction Company in the ports of Trieste and Genoa had significant implications. Given Trieste’s geographical position, it appeared to offer the opportunity to bring sea and rail connections together so that the port could regain the economic importance that it had in the days of the Hapsburg Empire and compete effectively with northern European ports such as Rotterdam (Maçães 2018: 65).

108 Countering China Portugal, which like Greece and Italy had been severely hit by the aftermath of the Great Recession and the eurozone debt crisis, signed up to the BRI in December 2018. The development plans included the prospect of a €640 million container port at Sines on the southwestern Portuguese coast, which would then be poised to become the “Atlantic End of the New Silk Road” (Wejchert 2021). There were, however, rivalries that had a strategic significance. The United States also had designs on Sines, and tensions over its fate involved direct US efforts within a European country (in this case, a NATO ally) to head off the BRI. US firms saw an opportunity to take advantage of the shale gas boom and radically increase liquefied natural gas (LNG) exports to Europe. Within this context, US firms sought to expand the port’s LNG terminal so that it might serve as a gateway to the European market (Wejchert 2021: 5; Youkee 2020). Such a development would, the US ambassador asserted, transform Portugal into “the Singapore of Western Europe” (Youkee 2020). Nonetheless, US concerns about China were also a factor and the ambassador later followed this up by arguing that Lisbon had to choose between China and the United States: “This is not the same China that [Portugal] has dealt with for the last 500 years. This is a new China, with long-term plans for malign influence through economics, politics or other means” (Youkee 2020).2 Eastern Europe

There has also been well-publicized engagement with the BRI in Central and Eastern Europe (CEE) and Hungary was the first European country, in June 2015, to sign an MoU. As of August 2020, one Chinese firm alone, PowerChina International, boasted that it had forty projects across the CEE countries (CMS 2020: 24). Within the CEE countries and although Hungary took the first formal step, BRI projects have been more of a feature in the Western Balkan countries that are not EU member states rather than EU nations. In other cases, projects have provided transportation routes between EU and non-EU countries (CMS 2020: 12). This is because the Western Balkan nations face particular structural weaknesses in terms of long-term infrastructural development and, at the same time, have limited access to EU funding (Gruebler 2021). While allowance should always be made for the blurred boundaries of the BRI, which creates significant methodological hazards in drawing firm conclusions, BRI projects included the upgrade of the Budapest-Belgrade railway linking Hungary and Serbia, the Pupin Bridge over the Danube, and the Kostolac B3 coal power plant in Serbia. There are plans for a high-speed rail line between Belgrade and Niš (Serbia’s third-largest city). In Montenegro and Bosnia and Herzegovina, as of 2020, motorways

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were under construction.3 In the latter country, BRI projects also included the 300-megawatt Stanari coal plant (CMS 2020: 14–16). Alongside these projects, there were also institutional developments that some saw as an inherent challenge to the EU. The 16+1 framework was a forum that had been established in 2012 to bring China together with the CEE countries outside of the EU framework.4 It served in part as a platform through which investment projects were considered.5 When 16+1 was first established, the China-CEE Investment Cooperation Fund was also launched. The fund was sponsored by the Export-Import Bank of China and the Hungarian Export-Import Bank, which sought in particular to develop infrastructure, telecoms, energy, manufacturing, education, and medical projects (CMS 2020: 15).6

Growing Dependence on China Although the BRI often did not appear to deliver on all its promises, and there were fewer projects than had been envisaged, these developments triggered concerns in other EU capitals, particularly Paris and Berlin, as well as Washington (Patey 2021: 178). These were sometimes expressed openly, particularly by the Trump administration, and for the most part with more diplomatic restraint in Europe. The port holdings raised strategic questions. Even if it was not opened up to the People’s Liberation Army Navy (PLAN), what if the port authority at Piraeus decided to close the port to US forces? It could, it was argued, constrain US and NATO operations (Lew et al. 2021: 64). Control of Piraeus also opened up the possibility that action could be taken against undersea cable systems (Lew et al. 2021: 112). The BRI’s emphasis on infrastructure (including airports and telecommunications systems) also raised security questions about the opportunity that it might offer Chinese state actors to engage in cyber espionage. Alongside these specific concerns, there were further questions for Europe and the United States about the potential of the BRI, over time, to change global trade flows in a more Sinocentric direction (Brattberg and Soula 2018). There also appeared to be evidence that the dependence of countries on BRI projects and Chinese investments was swaying the policy stances that they adopted within the EU and more broadly. China was, it was said, securing a political foothold. Some saw early signs of this in July 2016 in the EU’s response to China’s legal defeat when the Permanent Court of Arbitration in The Hague ruled on the case brought by the Philippines asserting that Beijing’s territorial claims violated Manila’s rights under the 1982 UN Convention on the Law of the Sea. In seeking to accommodate Greece and Hungary, the EU issued an anodyne statement that all sides

110 Countering China should resolve their differences peacefully. In sharp contrast, the United States and Japan urged China to respect the court’s decision (Emmott 2016). In March 2017, Hungary failed to support a joint letter denouncing the alleged torture of lawyers held in detention in China (Brattberg and Soula 2018). In June 2017, Greece vetoed an EU statement condemning Chinese human rights at the UN Human Rights Council (Cumming-Bruce and Sengupta 2017; A. Gupta 2018: 58; Freymann 2021: 163).7 Similarly, two years later, Italy abstained when a draft text of EU proposals for an investment screening mechanism, which threatened to limit Chinese investment in key industrial and strategic sectors, was put before the European Council (Casarini 2020: 103). At the very least, actions such as these seemed to threaten the internal cohesion of the EU and, in that much of its external strength depends on an appearance of unity, weakened it as an actor (S. Chan 2019: 26–27).

Pressures from Washington Even before President Trump took office, there were anxieties in Washington about the ties and connections between much of Europe and China. In 2015, the Barack Obama administration had been deeply critical of its allies and partners that had rushed to become members of the Chinese-led AIIB (Ashbee 2021). There were concerns that, by developing EU ties, China was seeking to counter US influence (Patey 2021: 131). At the same time, as noted above, the creation of the 16+1 format bringing China together with countries in Central and Eastern Europe seemed to jeopardize the unity of the EU (Denmark 2020: 175). Secretary of State Mike Pompeo took the initiative on behalf of the Trump administration in seeking to persuade European countries to take a more resolute policy stance toward China and pull back those nations that had decided to engage with the BRI. Pompeo announced publicly that he was “saddened” by Italy’s decision to sign the MoU with China: “It’s disappointing any time any country begins to engage in behavior and commercial interactions with China that aren’t straight up” (Agence France-Presse 2019). A tweet issued on behalf of the National Security Council in March 2019 stated bluntly: “Endorsing BRI lends legitimacy to China’s predatory approach to investment and will bring no benefits to the Italian people” (Chiu 2021: 172). A year later, as the US presidential election approached, Pompeo told the Italian government that China was “trying to leverage its economic presence in Italy to serve its own strategic purposes” (H. Roberts 2020). The Trump administration did not rely on words alone, but sought at times to use the promise of funding (albeit on a leverage model) to counter the BRI. Aside from the ventures offered by the Better Utilization of Invest-

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ments Leading to Development Act of 2018 (BUILD Act), it threw its weight to the Three Seas Initiative, which had been created in 2015 through a Polish and Croatian initiative. This brought together twelve CEE countries, all of which were EU member states, stretching between the Adriatic, Baltic, and Black Seas (hence, the name). Nearly all were also participants in 16+1 and did not seek to frame or use the Three Seas as a counterweight to the 16+1 or the EU. Nonetheless, the Trump administration pledged up to a billion dollars to it stating that this would “galvanize private sector investment in the energy sector to protect freedom and democracy around the world” (CMS 2020: 15).

The View from Berlin The city of Duisburg, hard-hit by industrial decline, established itself as an important BRI hub through its rail and river connections (von der Burchard 2019). It was reported in 2019 that thirty-five freight trains were running between Duisburg and China every week (Hänel 2019). Nonetheless, despite this and other expressions of interest in the BRI at a subnational level, the German government was wary of the initiative. Having said that, there was a more restrained tone than in Paris, where criticism had taken a more direct and strident form. Germany was more circumspect (Denmark 2020: 176). This could, of course, be put down to the ingrained caution and pragmatism of the Merkel government. However, business interests were also a factor, if only because the peak organization representing German industry and services, the Bundesverband der Deutschen Industrie e.V. (BDI), has a loud and effective voice. 8 The BDI claims to speak for 100,000 firms employing about 8 million workers constituted in thirty-nine industrial sector federations. The volume of trade between Germany and China also contributed to curbing vocal protests against Chinese practices. There was, however, a turning point. The publication of Made in China 2025, which laid out a strategy for using state resources to develop the Chinese high-tech sector in ways that appeared to pose a challenge to northern Europe’s technological prowess, appears to have jolted German business opinion (Patey 2021: 167). By 2019, while the BDI still sought to retain a balanced tone when considering relations with China, its language was nonetheless much more forceful than just a few years earlier: “China is and will remain a dynamically growing market, a driver of the global economy and key sales and procurement market for German industry. German industry wishes to take advantage of the opportunities offered by economic exchange with China. However, the challenges posed by China cannot be ignored” (Bundesverband der Deutschen Industrie e.V. 2019: 1).

112 Countering China The BDI also emphasized the ways in which German and other European firms operating in third-country markets where the BRI had a presence were disadvantaged. It was asserted that European firms were unable to bid for contracts. While the China-Pakistan Economic Corridor (CPEC), for example, created substantial interest among European companies, it was for the most part Chinese firms that secured contracts. Where European firms had a chance to participate, it was often at a late stage and at subcontractor level. Furthermore, the increasing use of Chinese manufacturing and technical standards as new markets emerged created substantial barriers to entry, thereby further limiting opportunities for European business (Mohan 2018). In sum, there was no fair or level playing field and German firms faced Chinese competitors that were directly and indirectly subsidized: Through BRI, the Chinese government supports the activities of Chinese companies abroad. German companies are . . . complaining about disturbances in competition in third markets, which are a pointer to subsidies for foreign activities of Chinese companies. Particularly low-cost offers by Chinese providers for projects abroad indicate that favourable loans from state banks and subsidised factor costs play a role. (Bundesverband der Deutschen Industrie e.V. 2019: 7)

These trenchant criticisms did not translate into backing for the Trump administration’s position toward the BRI or the adoption of punitive measures against China. Indeed, many in German industry would have shared the view that Trump’s election victory in 2016 was “a geopolitical gift for Beijing” (Patey 2021: 132). The BDI argued that a general “containment” of China or a process of “decoupling” was “not an option” (Bundesverband der Deutschen Industrie e.V. 2019: 2). Instead, the organization stressed the importance, despite the inherent constraints imposed by an open social market economy, of developing the competitiveness of Germany and the EU to take on China and its economic model (Patey 2021: 146–147). The pursuit of increased competitiveness had economic and political dimensions. The EU, it was argued, required an industrial policy based on research, development, education, infrastructure, and innovative technologies “that make our market economy more resilient” (Bundesverband der Deutschen Industrie e.V. 2019: 1). In particular, there had to be increased investment in digital infrastructure and artificial intelligence. At the same time, EU institutions had to be strengthened so that there was coordination between business and government and the EU’s foreign policy capacity was bolstered.9 Furthermore, the World Trade Organization (WTO), which had been weakened in the preceding years, in part because of the Trump administration’s action, had to be resurrected so that global trade and commerce would be governed by a rules-based order. In sum, the BDI called for multilateral efforts to ensure the reform of market processes, an indus-

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trial policy to increase German and European competitiveness (particularly in high-tech sectors), and unified EU policy responses to initiatives such as the BRI and China more broadly that would, by implication, limit the capacity of member states to engage with the BRI or at least put conditions on that engagement. This was echoed by others in Germany who called for a “One Europe” approach toward China based on a single strategy (Mohan 2018).

The European Union’s Strategies and Initiatives The European Union faced challenges in developing a unified, or even coordinated, set of policy responses to the BRI and China more broadly. In large part, this was a function of EU governance structures that can impede policymaking when there are significant differences and fractures within its ranks that cannot be reconciled or obscured through conventional forms of bargaining. However, there were also forces, particularly within Germany (where trading relations with China arguably mattered the most), seeking to soften the tone taken by the European Commission (Patey 2021: 134). Given this context, policy development inevitably took an uneven form and reflected the conflicting demands and preferences of those member states that had engaged with the BRI, those that sought to resist its lure, and those that expressed support through an MoU but nonetheless attempted to work with the BRI in limited ways that did not, they felt, have large-scale macroeconomic consequences or jeopardize their sovereignty. EU institutions therefore sought, even as the fractures were just becoming visible, to balance out these different interests, support European firms facing Chinese competition in third-country markets, and at the same time seek to pull the BRI toward EU rules and standards. This, it was argued, required critical and proactive engagement by the EU rather than individual member states with the BRI. The 2015 summit between the EU and China (celebrating the fortieth anniversary of diplomatic relations between China and the economic bloc) launched the EU-China Connectivity Platform. Its stated objective was to enhance synergies between the EU’s approach to connectivity and the BRI (Geeraerts 2019: 7–9). It was argued on the European side that there were, in particular, complementarities between the BRI and the European Commission’s Investment Plan for Europe (Juncker Plan), which had been announced the previous year and sought European infrastructural development and the creation of more cross-border connections funded by public and private sources, including institutional investors such as pension funds (Mission of the People’s Republic of China to the European Union 2015: 11). Federica Mogherini, vice-president of the European Commission, summed

114 Countering China up the EU strategy when she told the European Parliament that “only if we engage together with China, we can make our interests, our goals and our vision on connectivity converge” (Brattberg and Soula 2018). The EU’s efforts to “tame” the BRI and engage in what can be described as conditional pragmatic engagement between participant nations and the BRI continued (Duchâtel and Duplaix 2018: 6–7). In 2016, the European Commission published Elements for a New EU Strategy on China, which declared that “China will need to fulfil its declared aim of making its ‘One Belt, One Road’ initiative an open platform which adheres to market rules and international norms in order to deliver benefits for all and to encourage responsible economic behaviour in third countries” (European Commission and the High Representative of the Union for Foreign Affairs and Security Policy 2016: 10). At the same time, it looked forward to joint engagement in the construction of “sustainable and inter-operable cross-border infrastructure networks in countries and regions between the EU and China” (European Commission and the High Representative of the Union for Foreign Affairs and Security Policy 2016: 10). Two years later, in 2018, the EU released a report titled Connecting Europe with Asia. Mogherini stated that it was “not a reaction . . . to another initiative” (European Parliament 2021: 5). Nonetheless, the report marked a significant shift in tone and emphasis and there were claims by commentators that it “signaled a wider European will and determination to take back leadership” (J. Chan 2018). In part, that change was conveyed through omission. There were just five references to China in the entire document and the BRI did not secure a single reference (European Union 2018). Instead, there was just one allusion: “Bilateral cooperation with individual countries should be adapted to their specific situation. For instance, with China, the EU should strengthen the existing cooperation on the respective infrastructure and development cooperation initiatives, promote the implementation of the principles of market access and a level playing field, as well as rely on international standards within initiatives on connectivity” (European Union 2018: 11). Furthermore, there was much more emphasis on other nations in Asia and a commitment to “expand the dialogue on sustainable connectivity with other partners including Afghanistan, India, Indonesia, Iran, Pakistan, Russia, Republic of Korea, Turkey, and countries of Central Asia, as well as Australia and the United States” (European Union 2018: 11). While there was a pledge to “coordinate closely efforts to promote international standards and regional cooperation” with Japan, the overall message was “the more the merrier” (European Union Chamber of Commerce in China 2020: 33). The shift toward a toughened approach became more pronounced a year later. In March 2019, the European Commission issued further joint

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communication, which declared that China was “an economic competitor in pursuit of technological leadership and a systemic rival promoting alternative models of governance” (European Commission and HR/VP Contribution to the European Council 2019: 1; von der Burchard 2019). It looked forward to the development of railway corridors between the EU and China but did not refer to the BRI (European Commission and HR/VP Contribution to the European Council 2019: 5). The communication also sought to rein in those European countries that had engaged with the BRI: “Neither the EU nor any of its member states can effectively achieve their aims with China without full unity” (European Commission and HR/VP Contribution to the European Council 2019: 2). This message was reinforced by European Commission vice-president Jyrki Katainen, who, in noting that thirteen EU countries had at that point signed an MoU with China’s Belt and Road Initiative, stressed that conditions and rules must be observed: “All the member states, and also Belt and Road operators, must comply with our regulations and rules, which we have when it comes to competition and transparency. . . . If the Belt and Road initiative is providing financing to the projects, it means that the member states must pay the loans back. So, there is [sic] no free lunches” (von der Burchard 2019).10 This was followed up in September 2019, when the EU and Japan launched the EU-Japan Partnership on Sustainable Connectivity and Quality Infrastructure covering sectors ranging from transportation to the digital industries (European Parliament 2021). It was hailed by Japanese prime minister Shinzo Abe, who said: “Whether it be a single road or a single port, when the EU and Japan undertake something, we are able to build sustainable, rules-based connectivity from the Indo-Pacific to the Western Balkans and Africa” (Peel 2019). There was a statement by the EU and the Association of Southeast Asian Nations (ASEAN) on connectivity in December 2020 and reports of a potential global infrastructure partnership between the EU and India (Peel 2019). These policy shifts set the scene for further developments. At the beginning of December 2021, the European Commission launched the Global Gateway.11 This initiative, as the name suggests, looked beyond Eurasian connections and sought to ensure that the EU would be “globally connected” by developing ties with Africa and Latin America, which would bring it into competition with the BRI and other forms of Chinese investment (Lau 2021). There was a pledge to work with partners (including Build Back Better World [B3W]) and mobilize up to €300 billion to trigger private investment in projects such as transport, energy, and digital infrastructure (European Parliament 2021; Lau 2021). Global Gateway also declared its commitment to the “rule of law, human rights, and international values” (China-Britain Business Council 2022).

116 Countering China Criticisms For the most part, infrastructure initiatives rest on the concept of leverage so that relatively small sums of public funding would, it was projected, trigger much larger amounts of private sector investment. The assumptions about the degree of leverage for Global Gateway through guarantees were, however, significantly smaller than many others. There were at the same time efforts to reduce the fragmentation and overlaps among different EU initiatives (Tagliapietra 2021). Nonetheless, the European Union Chamber of Commerce in China voiced significant criticisms of EU strategies, thereby expressing sentiments that were shared in Washington. EU infrastructural development policy was, the Chamber argued, “all but unknown, underdeveloped and reactive, and is slow and arduous in project execution. For all its shortcomings, the BRI is fully developed, and proactively seeks out partners and projects, delivers results quickly, and is on the lips of leaders across the globe” (European Union Chamber of Commerce in China 2020: 35–36).

Dancing to Washington’s Tune? There was a noteworthy degree of legitimacy in these claims, although much of the critique could also be leveled at Washington. Nevertheless, the amount of policy convergence between Washington and the European Union was significant. As this chapter has charted, the EU moved beyond pragmatic engagement and shifted toward a position where it attempted to circumvent the BRI by developing relationships and partnerships across the Asian region while, at the same time, emphasizing the norms that should underpin infrastructural development and seeking to rein in those member states that had embraced the BRI so as to thereby establish more unified policy responses. The EU also sought to replicate certain features of US policy, for example, the Committee on Foreign Investment in the United States (CFIUS), by seeking to develop effective investment screening mechanisms.12 Although there has been a substantial amount of policy convergence between the United States and the EU in that both have talked in similar terms about the BRI’s perceived failings and have become increasingly fearful of China’s involvement in telecommunications, there are also policy differences toward the BRI and China that should be acknowledged. Washington was primus inter pares but did not always get its way. This was powerfully illustrated when, in December 2020, just before President Biden took office, the EU entered into the EU-China Comprehensive Agreement on Investment (CAI) despite pressures from the incoming

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administration, to which it would have been predisposed after the strains of the Trump years, to delay and join together to develop a common approach (Lew et al. 2021: 40).13 There were five principal points of difference. First, Europe was an end destination for connectivity projects with China and certain European countries were major recipients of BRI investments. Given the sunk costs and the policy legacies created by those earlier decisions, the EU was tied into a degree of cooperation and engagement, although the Covid-19 pandemic and the 2022 Russian intervention in Ukraine have put a question mark against the prospects for global connectivity and led commentators to raise the specter of “deglobalization.” Second, China was seen in more multifaceted terms in the EU (Denmark 2020: 175). Whereas the United States emphasized the competitive character of its relationship with China (despite occasional references by the Biden White House to the possibility of cooperation around climate change), the European Commission described China as a “cooperation partner” and a “negotiating partner” as well as an economic competitor and a systemic rival (Denmark 2020: 175). Third, the United States was seeking to counter China across many fronts, including trade relations and the imposition of tariffs. As part of this, the United States sought to take a whole-of-government approach. The EU did not sign on to the trade war with China and sought much more of an issue-by-issue and sector-by-sector approach. Fourth, the tensions with China and the scale of the BRI began to pull the EU toward calls for a more overt and developed industrial policy that, through interventionism and support in core economic sectors, could boost European competitiveness. While there were developmentalist voices in the United States and the CHIPS and Science Act was passed by Congress in July 2022 providing subsidies and investment tax credits for US semiconductor production, the many institutional impediments to reform at the national and state levels militated against comparable policies in the United States. Fifth, the EU stressed the importance of a values-based global order, whereas, notwithstanding President Biden’s periodic references to rallying the democracies, the United States appeared to emphasize power politics (Denmark 2020: 173). This led the EU to place greater weight on the resurrection of bodies such as the WTO that would set global rules and act as arbiters.

The United Kingdom and the BRI The United Kingdom deserves close attention. Despite the 2016 Brexit referendum and its consequences, Britain remains a major economic power and has always sought to define itself as the United States’ closest European ally

118 Countering China and partner. The term special relationship has become a trite cliché, but successive British governments have believed that it could, with sufficient endeavors, be made reality. Certainly, Theresa May and her successor, Boris Johnson, appear to have believed that they could establish an effective personal relationship with President Trump to take advantage of his apparent affection for the United Kingdom and his enthusiasm for Brexit as a project. The latter had markedly more success in this than the former. There is, however, a further reason why the United Kingdom should be considered in the context of US policy toward China. When David Cameron was prime minister (2010–2016) and while Boris Johnson was serving as mayor of London (2008–2016), there had been visible and enthusiastic backing for greatly increased ties with China. There were descriptions of the period as the golden era of Anglo-Chinese relations. The crowning moment came with Chinese president Xi Jinping’s state visit to Britain in October 2015 when Xi declared that there was a “community of shared interests” between the two nations (BBC.com 2015). The United Kingdom was increasingly out of step with its principal ally and strains were beginning to appear within the special relationship (J. Ford and Hughes 2020). Cheerleading for the BRI

Within this context, and up until late 2019, the British government described the BRI in positive terms. Indeed, at times, they hailed it as transformative and lauded the commercial opportunities that it promised to offer the United Kingdom. Philip Hammond, chancellor of exchequer in May’s government, told an audience in Beijing: “As China drives forward the Belt and Road initiative from the east, we in Britain are a natural partner in the west, standing ready to work with all Belt and Road partner countries to make a success of this initiative” (Reuters 2017a). For her part, May echoed Hammond’s comments, repeating the statement that the United Kingdom was a “natural partner” for the BRI (GOV.UK 2018). In 2017, the United Kingdom, together with twenty-six other nations, endorsed the Guiding Principles on Financing the Development of the Belt and Road (United Kingdom Parliament 2019a). Comments such as these were not the sole prerogative of May’s government, but they continued after her political downfall. On taking office as prime minister amid the tensions that arose from the unfolding Brexit process, her successor Johnson stated: “We are very enthusiastic about the Belt & Road Initiative, very interested in what President Xi is doing” (Devonshire-Ellis 2019). These expressions of enthusiasm certainly had a rational basis. There was a hope of significant market opportunities for British firms in the provision of infrastructure across Asia and beyond. Alongside this, the United Kingdom itself had pressing needs. Sustained long-term underinvestment

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had created an infrastructure gap estimated to be close to £500 billion (Pinsent Masons and the Centre for Economics and Business Research 2014). More developed infrastructure would, it was argued, bolster economic growth, increase productivity levels, encourage innovation, reduce social tensions, and boost competitiveness, thereby creating employment (Infrastructure and Projects Authority 2016: 7). Nonetheless, public funding was limited as, from 2010 onward, the Conservative-led coalition that held office until 2015 had been committed to the pursuit of “austerity” and budget deficit reduction (Harris 2017: 251– 252). Other sources of investment were therefore necessitated. Policymakers were, furthermore, forced to depend on the leverage models used in other infrastructural development plans whereby a relatively small sum of public money would, it was projected, trigger much larger amounts of private sector investment. Northern Powerhouse

There had long been talk in the United Kingdom of a “north-south divide,” but the demise of traditional labor-intensive industries put the north of England at a sustained structural disadvantage. The coalition government committed itself to the creation of an economic powerhouse across the region and, given the prevailing economic and political circumstances, sought inward investment from China. Beijing seemed at first ready to accept that the BRI could play a role in transforming the region. There was a commitment to conjoin the BRI and the Northern Powerhouse during President Xi’s 2015 visit to the United Kingdom (PricewaterhouseCoopers [PwC] China, Hong Kong and Macau 2015: 5). Then, at the inaugural Belt and Road Summit in May 2017, the Northern Powerhouse was among a few chosen projects hailed in specific terms by Xi in his opening address: “We have enhanced coordination with the policy initiatives of relevant countries, such as the Eurasian Economic Union of Russia, the Master Plan on ASEAN Connectivity, the Bright Road initiative of Kazakhstan, the Middle Corridor initiative of Turkey, the Development Road initiative of Mongolia, the Two Corridors, One Economic Circle initiative of Viet Nam, the Northern Powerhouse initiative of the United Kingdom and the Amber Road initiative of Poland” (Belt and Road Advisory 2017). In the United Kingdom, the December 2019 general election seemed to add further political weight behind the commitment to the Northern Powerhouse. As the Labour Party crashed to a bruising defeat, the Conservatives seized socially disadvantaged constituencies in the north that it had long held. The challenge for the Conservatives was then to retain these seats in subsequent elections. There was renewed pressure to secure funding and investment for the north under the slogan of “leveling up.”

120 Countering China At the same time, there was also interest in, and enthusiasm for, the BRI from economic sectors in the United Kingdom beyond those that might become directly involved in infrastructure development projects. Some financial institutions embraced the initiative publicly and successive lord mayors representing the City of London visited China to promote links between the United Kingdom’s financial services (including the fintech sector) and the BRI (Maçães 2018: 160; City of London 2019). There were particular reasons for these outreach efforts. A report suggested that there were complementarities in that China had strengths in, for example, construction efficiency, engineering technology innovation, and cost performance, while the United Kingdom had competitive advantages in engineering design, law, consulting and management, and financial services as well as a “long-standing trading history with many of the 3rd markets China wishes to engage along the BRI” (Confederation of British Industry 2019). As the BRI began to respond to criticism that its early projects were contributing to environmental degradation, and questions arose about Chinese capacity to sustain development on the scale that had been envisaged, the BRI took a green turn that also seemed to offer openings for the United Kingdom. At the second Belt and Road Forum for International Cooperation (2019), the UK-China Green Finance Taskforce announced the formation of the Secretariat for the Green Investment Principles for the Belt and Road (United Kingdom–China Green Finance Centre 2021). Pulling Back

Notwithstanding these expressions of interest and the pull of the BRI for the United Kingdom, the May and Johnson governments began a retreat. It, however, took an unsteady and uneven form. When Theresa May visited Beijing at the beginning of 2018, she stated that she “welcomed the opportunities” offered by the BRI, but at the same time refused to sign a proposed MoU that was regarded as an initial step in establishing collaboration with the initiative (G. Parker, Kynge, and Hornby 2018; Weidenfeld 2018). Nonetheless, while its scope was limited, Graham Stuart, minister for investment at the Department for International Trade, signed a Departmental Memorandum of Understanding with China’s National Development and Reform Commission on Infrastructure Cooperation. He described this as “a technical agreement” that laid a basis for facilitating cooperation and collaboration between UK and Chinese firms on infrastructure projects in third-country markets (China-Britain Business Council 2022; United Kingdom Parliament 2019b). Although, as noted above, Boris Johnson made a statement in support at the end of 2019, there was a marked lack of backing or enthusiasm for the BRI within Parliament. In March 2019, the House of Commons Foreign

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Affairs Committee recommended that projects should be judged on a caseby-case basis and that the United Kingdom should continue with its refusal to sign an MoU (Medcalf 2020: 192). The House of Commons’ International Trade Select Committee briefly considered the BRI, but it called only three witnesses and consideration did not progress the matter further (International Trade Committee 2019). Against this background, the government began to shift. In June 2019, in answer to a written question in the House of Commons, the parliamentary under-secretary of state for exports announced the United Kingdom restated that it was “keen to work closely with China to deliver practical cooperation on the potential opportunities from the BRI,” but added that it had “no plans formally to join the BRI” (United Kingdom Parliament 2019b). Two years later, in the wake of the 2021 Group of 7 (G7) meeting that launched B3W, the United Kingdom came out in open opposition to the BRI. Liz Truss, who became foreign secretary in September 2021 announced that the United Kingdom’s reconfigured international development strategy was to concentrate on countering the influence of “malign regimes” in cooperation with other major powers: “We’ve seen authoritarian actors increasingly use aid funding and investment as a way of exerting control and coercion over countries. . . . I recognize that the UK alone is not going to counter the impacts of the Belt and Road initiative, but if you look at all of the aid money from all of the G-7 countries, it’s more than what China’s investing” (Ainsworth 2022). In September 2021, at about the same time that Truss became foreign secretary, the British government published Global Britain in a Competitive Age: The Integrated Review of Security, Defence, Development and Foreign Policy, which laid out its plan to engage in particular with the Indo-Pacific region. However, it made only made one reference to the BRI and represented it in critical terms as evidence of China’s “increasing ambition to project its influence on the global stage” (HM Government 2021: 26). Explanations

Why, then, despite the effusive tone of its earlier public statements, did the UK government resist calls to participate and eventually turn to oppose the BRI? A significant porrtion of the answer, of course, is that backing for the initiative became lost amidst a broader deterioration in bilateral relations between the West and Beijing. Indeed, the overall relationship was icy by the end of the decade. Although there were references to there still being areas of potential cooperation, such as in addressing climate change and counternarcotics policy, the United Kingdom “performed an extraordinary about-face, from celebrating a new ‘golden era’ of Sino-UK relations in 2015 to deploying an aircraft carrier to the South China Sea” (Tooze 2021: 18).

122 Countering China There was also a backlash against the perceived excesses of the golden era. As the relationship between the West and China worsened, it became selfevident across the political spectrum that the exuberance of the earlier period, and the statements that had been made at the time, had been misjudged in terms of China’s intentions. The security measures introduced in Hong Kong and the Chinese government actions in Xinjiang were widely cited. The shift in the composition and character of the Conservative Party within the House of Commons also had an impact. In April 2020, the China Research Group (CRG) was established by two influential Conservative backbench members of Parliament, Tom Tugendhat and Neil O’Brien, both seen as China hawks. The name was taken from the European Research Group that had functioned as the most influential and abrasive Brexiteer faction (China Research Group 2021). There were also threats of rebellion within the party and, indeed, there was a backbench revolt against Huawei’s involvement in the development of fifth-generation (5G) technology (N. Smith 2020). There was another reason why the United Kingdom pulled away from the BRI. The chances of the BRI playing a role in British infrastructural development began to dim. Indeed, there was an increasingly large question mark against the role that the BRI and Chinese investment could play in addressing the United Kingdom’s domestic infrastructure gap, given that Chinese companies were focused on mergers and acquisitions rather than infrastructure (Kratz, Zenglein, and Sebastian 2021: 15; J. Ford and Hughes 2020). Furthermore, dock facilities aside, in addition to the fact that their potential was placed in jeopardy by the trade barriers that Brexit imposed, the United Kingdom could as an island nation play only a limited part in such connectivity initiatives (Pettis 2019). There is truth in the claim that “all roads from Britain lead to nowhere” (Rowley 2019).

The US Connection There was US pressure on the European countries, spearheaded by Secretary of State Pompeo, to take a more openly assertive stance toward China through, for example, investment screening, exclusion of Chinese companies from the telecommunications infrastructure, and withdrawal from Chineseled projects. However, while the May and Johnson governments did much to avoid open differences with the Trump administration, there were US pressures. Nonetheless, these were not simple or straightforward processes of direct leverage by Washington. Instead, US pressure was, as in other countries and settings, indirect and mediated by intervening variables. If the evolution of UK policy toward China and the BRI is considered, the logics unleashed by Brexit proved important. The 2016 Brexit referen-

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dum vote was followed by a prolonged period of negotiation with the EU and a growing understanding that there would be a “hard” Brexit creating significant trade barriers for UK business. This led directly to the adoption of Global Britain as both a slogan and strategy by those, including much of the government, who did not want Brexit to retreat into the forms of protectionism and economic nationalism often promoted by President Trump. In January 2017, May declared that the British people “voted to leave the European Union and embrace the world. . . . I want us to be a truly Global Britain . . . a country that goes out into the world to build relationships with old friends and new allies alike” (Heron and Siles-Brügge 2021: 733). While Global Britain sought to create an ideational framework that drew on constructions of a lost imperial past as well as notions of national freedom, it also rested on hopes and expectations of securing a UK-US free-trade agreement. Indeed, that agreement was central to Brexit as an economic and political project. Having said this, even years after the referendum, the route to securing a UK-US agreement was still far from clear or certain. There was significant unease in Washington about the United Kingdom’s handling of the Northern Ireland Protocol, which formed part of the withdrawal agreement from the EU. Even more significantly, the wording of the United States-Mexico-Canada Agreement (USMCA) in 2018–2019, which superseded the North American Free Trade Agreement (NAFTA), appeared to have significant implications for a UK-US trade agreement. The USMCA incorporated a section (Article 32.10) that sought to prevent Canada and Mexico from concluding trade deals with Beijing. It specified that if any of the signatories signed a free-trade agreement with a “nonmarket” country (and China was self-evidently in mind), the other USMCA countries could terminate the agreement by giving six months’ notice. Although Ottawa was to claim otherwise, this appeared to prevent Canada and Mexico from pursuing a free-trade deal with China (C. Cooper 2020; Weidenfeld 2018). Within this context, hopes of a trade agreement with China, which may well have explained the statements of enthusiasm for the BRI, were dashed.14 There was now much less for the United Kingdom to gain from the BRI. At the same time, the perceived need for a UK-US agreement assumed even greater importance. There was an intensified need to “court” the White House as well as Democrats and Republicans on Capitol Hill. This pulled the British government’s policy positions and its overall strategy toward convergence with US policy on China and the BRI. UK policy, which was outlined in Global Britain in a Competitive Age, which set out the case for a “tilt to the Indo-Pacific,” thus began to dovetail with the United States’ strategic framework (HM Government 2021). Indeed, the 2021 Integrated Review declared that China was “a systemic competitor” and that its growing power and assertiveness was

124 Countering China “likely to be the most significant geopolitical factor of the 2020s” (HM Government 2021: 26). AUKUS (Australia, the United Kingdom and the United States), which was announced in September 2021, was a further fulfillment of the vision. The pact sought to enhance military capabilities across the IndoPacific and assist Australia in securing eight nuclear-powered hunter-killer submarines (to the chagrin of France, which was originally to supply twelve conventionally powered submarines) (Camroux 2021). These military moves were complemented by assertions that the United Kingdom should pursue a values-based approach and a forceful commitment to “democratic values” (Heron and Siles-Brügge 2021: 734). Summary This chapter has charted the course of developments in the EU and the United Kingdom. It has argued that after seeking pragmatic engagement with the BRI, the EU turned against it as some implications of the BRI became more visible and as the United States embraced a policy of strategic competition with China. There were, however, continuing transatlantic differences. And for its part, the United Kingdom, which had initially embraced the BRI, followed a path of its own and the reasons why it turned away from the BRI lie in the unfolding consequences of the Brexit referendum decision. Chapter 8 continues my survey of policy responses to the BRI by turning to the initiatives taken by the Biden administration, which not only maintained but hardened US opposition to Beijing. Nonetheless, the administration sought to cooperate with allies and partners in a much more consistent way than its predecessor, while at the same time focusing on US infrastructure and national competitiveness. Notes 1. COSCO began operations in Piraeus on a leasing basis in 2008–2009 (Le Corre 2018: 165). 2. The Covid-19 pandemic delayed a decision on the fate of Sines by Portugal. 3. The highway scheme in Montenegro has been cited as a further example of the unsustainable indebtedness that can be caused by BRI projects. The country approached the EU for assistance in making repayments on a billion-dollar loan from the Export-Import Bank of China (China EXIM). The European Commission eventually turned down the request (Brattberg and Soula 2018; Chan 2018; Jennifer Hillman and Tippett 2021). 4. Although not stated publicly by EU institutions, commentators in Western Europe and the United States raised concerns about the 16+1 framework, which they regarded as a bid to “divide and conquer” Europe.

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5. The group became 17+1 between 2019 and 2021 after Greece became a member and before Lithuania pulled out. 6. Certain caveats should, however, be entered. In simple quantitative terms and if overall Chinese investment is considered, Chinese investments in the four countries (Great Britain, Germany, France, and Italy) were greater than China’s financial commitment to all of the CEE countries taken together (Bąk 2019: 12). It has also been argued that with the exception of Hungary, the other EU member states that signed an MoU did it more as a gesture than as the basis for a changed relationship: “There is little ground to argue that membership of the BRI has increased China’s economic and/or political influence and leverage over the Czech Republic, Poland, Greece, Italy or Portugal” (Ghiretti 2021: 15). 7. The extent of China’s sway in countries such as Italy or Greece is, however, open to argument. It has been claimed that Italy has, despite its BRI ties, taken a tough position on Huawei and vetoed an agreement between Huawei and Italian telecommunications provider Fastweb in 2020 (Lew et al. 2021: 55). Others suggest that if considered comparatively, Italy has done less to tighten the regulatory framework. Huawei, they note, provides Italy’s fourth-generation technology and is still involved in fifth-generation trials (H. Roberts 2020). 8. In contemporary Germany, as many commentators have observed, nonstate actors play a “huge role in shaping the foreign policy of the federal government” (Ciesielska-Klikowska 2018: 436). It should be added that in contrast with other EU countries, China had by 2020 become Germany’s second most important market if the export of goods is considered. It is also China’s most important market in Europe (Ciesielska-Klikowska 2018: 441). 9. Commentators suggested that the EU was better placed to develop unified policy responses after the United Kingdom’s final departure from the Union (Ntousas and Minas 2022: 5). Certainly, while the United Kingdom had swung against Beijing (see text below), it would have resisted attempts to develop something approximating to an EU foreign policy. 10. There were signs of a policy shift following Mario Draghi’s appointment as Italian prime minister in 2021. One commentator suggested that Italy felt “buyer’s remorse” for its signature on the MoU (Medcalf 2020: 191). Certainly, there seemed to be a change in attitude when, in March 2021, Draghi used the “golden power” rule to oppose the takeover of a small semiconductor firm by a partially state-owned Chinese company (Hong 2021: 2). 11. While not specifically directed toward connectivity and infrastructure, the EU also launched its Agenda for the Mediterranean. This incorporated an Economic and Investment Plan to boost social and economic development in the Southern Neighbourhood. There was an emphasis on “creating growth and jobs, investing in human capital or good governance” (European Commission 2021). 12. As the Covid-19 pandemic led to lockdowns, many firms appeared financially fragile and vulnerable to takeover. 13. In May 2021, efforts to ratify the CAI were suspended by the European Parliament. 14. Boris Johnson’s government also announced its intention to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the free-trade pact that Japan resurrected after the Trans-Pacific Partnership (TPP) was abandoned by the Trump administration: “Joining CPTPP puts Britain at the heart of a dynamic group of countries. . . . And as these economies grow, it is even more important that the UK is in a free trade agreement with them, so that we benefit from this growth” (United Kingdom Parliament 2022).

8 Build Back Better at Home and Abroad

The United States’ responses to the Belt and Road Initiative (BRI) were not limited to initiatives such as the Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act) or the Blue Dot Network (BDN). The challenge posed by the BRI not only triggered calls for infrastructural development on a scale that could seriously counter China’s efforts, but also fed demands for infrastructure projects within the United States itself. On the domestic front, President Joe Biden put forward the American Jobs Plan, which, in its first incarnation, called for $2.6 trillion of spending. Then, in June 2021, at his urging, the Group of 7 (G7) leaders meeting agreed to Build Back Better World (B3W). The White House described it as “a values-driven, high-standard, and transparent infrastructure partnership led by major democracies to help narrow the $40+ trillion infrastructure need in the developing world” (Goodman 2021). Popular commentaries inevitably drew comparisons with the BRI.

US Infrastructure The exhausted state of much US physical infrastructure is readily evident to professional commentators, casual visitors, and, not least, to those whose lives are blighted by urban decay. The United States may be a hegemon but, in terms of infrastructure, it compares poorly with many much smaller and less affluent nations (McBride 2017; OECD 2016: 89). Estimates suggest that during the decades that followed the construction of the interstate highways in the 1950s, the United States has devoted less than 1 percent of its gross domestic product (GDP) to domestic infrastructure development. 127

128 Countering China Inadequate infrastructural provision, it was argued, has contributed to the United States’ low productivity growth record. While the country is still among the world’s highest in terms of labor productivity levels, annual productivity growth has averaged only about 1.5 percent since 1970 except in the late 1990s and early 2000s, about half the rate achieved in the postwar decades. Indeed, since the last three months of 2007, labor productivity has grown at an annualized rate of just 1.1 percent (Sprague 2017: 3). Infrastructural questions also merged with environmental and social concerns. More advanced forms of green infrastructure (as opposed to road construction) could lead to energy savings and reductions in carbon emissions. Furthermore, the consequences of decaying infrastructure were highlighted by the lead contamination of the water supply in Flint, Michigan.1

High-Speed Rail Some forms of proposed infrastructural development, such as high-speed rail provision, secured particular attention in the United States, as they seemed to symbolize US backwardness when set against China and many other nations. As has been pointedly noted, Laos “now has a faster train than anything the United States has” (Carrai and Yee 2022). High-speed rail was described as President Barack Obama’s “signature transportation project,” and in his 2011 State of the Union address he announced: “Within 25 years, our goal is to give 80 percent of Americans access to high-speed rail. . . . This could allow you to go places in half the time it takes to travel by car. For some trips, it will be faster than flying— without the pat-down” (as quoted in Nixon 2014). While Democrats were in the forefront of calls for infrastructural development, established ideological and partisan dividing lines were sometimes upended (M. Cooper 2012). Donald Trump’s candidacy in the 2016 presidential election and his eventual victory led to a further crossing of dividing lines. It held out the promise of a restructured Republicanism that owed as much to economic nationalism and populism as US conservative traditions. While earlier Republican presidential platforms had briefly referred to infrastructural development (although the emphasis had been on airports, the roads, and docks), Trump spoke of infrastructure in a much broader way, tying it to his vision of economic nationalism and thereby representing it as an overriding national priority. At one point, albeit early in his campaign to secure the Republican nomination, he threw his weight behind high-speed rail. In what Time magazine described as a “freewheeling” speech in March 2016, Trump said: “It’s sad . . . that the American rail system is so dilapidated while China’s is now slicker than ever. They have trains that go 300 miles per hour. . . . We have trains that go chug . . . chug . . . chug” (as quoted in Edwards 2016).

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These were, however, just campaign asides and underdeveloped ambition. Efforts to translate these sentiments into some form of policy reality hit major institutional and ideational obstacles.2 Both expansion and modernization have for a long time been hemmed in and stymied. It is perhaps no coincidence that US infrastructural development has largely taken place in periods of perceived crisis (e.g., the building of the interstate highways during the 1950s) or at times of intense nation building.

The Biden Administration and the American Jobs Plan Against the background of the Covid-19 pandemic, the recession that it caused, Democratic demands for the pursuit of a radical economic agenda, and perhaps Trump’s personal backing for infrastructure came together. Taken together, they pulled Biden, long seen as a cautious and pragmatic veteran Washington insider, to put forward the American Jobs Plan. It came under the umbrella of the broader Build Back Better agenda. The American Jobs Plan, as Biden announced at a press conference in early April 2021, rested on $2.2 trillion in increased government spending over ten years and $400 billion in tax credits. It was, Biden asserted, “not a plan that tinkers around the edges; it’s a once-in-a-generation investment in America unlike anything we’ve done since we built the Interstate Highway System and won the Space Race decades ago” (White House 2021c). Indeed, it was to be “the single largest investment in American jobs since World War Two” (White House 2021c). Certainly, the scale of the American Jobs Plan far exceeded that of the New Deal in the 1930s (which has been put at $324 billion when adjusted to today’s dollars) and President Lyndon Johnson’s Great Society, which, if the cost is calculated in the same way, can be priced at around $520 billion (Van Dam 2021). The American Jobs Plan was, in part, structured around established forms of infrastructural development. Despite concerns among some Democratic constituencies about the use of private automobiles and the externalities they created, the proposals included an increase of $115 billion to “modernize the bridges, highways, roads, and main streets that are in most critical need of repair,” as well as the promotion of electric vehicles (White House 2021a). The plan also incorporated proposals for the modernization of public transit and investment in passenger and freight railway transportation. It addressed drinking water supply, pandemic prevention, and the expansion of high-speed broadband infrastructure to reach 100 percent coverage. There was an emphasis, furthermore, on lower-income and distressed communities and the reconnection of neighborhoods divided by urban development projects.

130 Countering China The American Jobs Plan also, however, incorporated substantial elements that went far beyond traditional uses of the word infrastructure. Indeed, the term was understood in terms of human capital as well as physical capital. There was, for example, a commitment to modernize public schools and ensure workforce training. Alongside this, there were features that set broad, long-term macroeconomic goals. US national competitiveness would be radically accelerated by increasing research and development (R&D) and by boosting firms’ access to investment funding. The plan promised to “increase access to capital for domestic manufacturers. America’s manufacturing industry needs to innovate, adapt, and scale to win the industries of the future” (White House 2021e). The size and scale of the American Jobs Plan was, as noted above, staggering. Just over a decade previously, and despite the severity of the financial crisis and the depth of the recession, the Obama transition team had quickly retreated from tentative suggestions that there should be a fiscal stimulus package of more than a trillion dollars and, instead, settled for legislation initially estimated to cost $787 billion. When Christina Romer, incoming chairman of the Council of Economic Advisers, made the case for a larger figure (about $1.2 trillion), the incoming chief of staff, Rahm Emanuel, reportedly responded, “What are you smoking?” (Lizza 2012). Peter Orszag, who was to become director of the Office of Management and Budget, later said: “There was the concern that we would look wacko lefty” (Suskind 2011: 154). The discussions within Obama’s circles appear to have quickly concluded that a number approaching a trillion dollars was not politically credible or feasible.

The Impact of China and the BRI Although there were times early in Joe Biden’s presidency when his supporters believed that he could follow in President Franklin Roosevelt’s footsteps, the chances of passing the American Jobs Plan, particularly in its original form, always seemed limited. The Democrats had a tenuous hold over Congress and a substantial number of Republicans challenged the legitimacy of Biden’s election (Jones 2021). A question, therefore, arises: How and why did the White House believe that it could put forward and “sell” a plan on this size and scale? A large part of the answer lies in perceptions of China and the BRI. In 2021, the sense of intense economic and strategic competition with China opened the way for far more radical and expansive narratives. For the Biden White House, these appeared to have coalition-building potential because hostility toward China was one issue that provoked bipartisan responses. It would thus appeal to core Democratic constituencies, but also win the backing of more centrist Republican voters and some Republicans within

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Congress by enabling the country to stand up against the country’s competitors and adversaries.3 It also had resonance with the wider public. According to a Pew poll conducted in February 2021, 67 percent had “cold” feelings toward China on a “feeling thermometer” compared to a figure of 46 percent in 2018. During the same period, the proportion of those reporting “very cold” feelings rose from 23 percent to 47 percent (Silver, Devlin, and Huang 2021).4 China was thus the Other that enabled the White House to put forward the infrastructure plan: “This is the moment to reimagine and rebuild a new economy. The American Jobs Plan is an investment in America that will create millions of good jobs, rebuild our country’s infrastructure, and position the United States to out-compete China” (White House 2021a). There were implied comparisons with the Cold War decades and strategic competition with the USSR: “The American Jobs Plan will invest in America in a way we have not invested since we built the interstate highways and won the Space Race” (White House 2021a). Indeed, the centrality of China, and the perceived threat that it posed, was acknowledged in many of the commentaries about the American Jobs Plan: “Mentioning China so often when talking about a domestic infrastructure plan might seem odd. But it makes sense if you realize that Biden’s signature domestic economic policy plan is also a critical element of a broader foreign policy strategy to thwart China’s growing power and global influence” (Nilsen and Ward 2021).5 Daleep Singh, a deputy national security advisor and deputy director of Biden’s National Economic Council, put it in even starker and more explicit terms: If we don’t act, we’re just going to fall further behind. China spends three times as much on infrastructure as a share of GDP than we do. . . . In the 1960s, around the time of Sputnik, we spent more on public [research and development] than any other country and companies combined—about 2% as a share of our economy. And that gave us a huge lead on technology until the 1990s. And now, if you look at what our federal government spends on public R&D, it’s less than half that amount. And meanwhile, in China, there we’ve seen R&D expenditures increase roughly 30 times since 1990. (Detrow and Ordonez 2021)

The framing of the American Jobs Plan also drew on, and was bolstered by, images of wartime and wartime egalitarianism. It sought to evoke notions of a common, shared sacrifice on behalf of the nation. Within the context of global competition with China, the footloose corporations and those that gained from their offshoring activities had to be reined in. In asserting this, the frame drew on themes that were at times visible and at other times more submerged (particularly during the Bill Clinton years) but had long been a feature of traditional Democratic discourses.

132 Countering China Competition with China laid a basis for taking the Democratic critique of offshoring by large corporations a stage further. Multinational cooperation was required between the democracies to curtail a race to the bottom. Corporations had to be reined in if the United States was to assert itself against China. The American Jobs Plan incorporated a proposal that infrastructural development should, in part, be funded by increasing the corporate tax rate to 28 percent. This was to represent a significant reversal of a key plank in the Tax Cuts and Jobs Act of 2017, the signature legislation sought by the Trump administration and enacted by congressional Republicans, which had reduced corporate taxes to create a single rate of 21 percent.6

Congressional Opposition Nonetheless, despite the belief among senior Democrats that a coalitional bloc could be constructed around the American Jobs Plan to ensure passage, the obstacles facing the administration condemned it to face more or less the same fate as earlier large-scale infrastructure development projects. After prolonged wrangling in Congress, some of the plan’s proposals were incorporated within the Bipartisan Infrastructure Bill that became law in mid-November 2021. Despite the intensity of partisan polarization processes, thirty-two Republicans in the House of Representatives and the Senate backed the measure. The price for securing this support was, however, a radically reduced level of projected expenditure ($550 billion in newly authorized expenditure) and a relatively limited, traditional understanding of what constituted “infrastructure.” Spending was largely restricted to roads, bridges, rails, seaports, airports, and inland waterways. A second infrastructure bill (the Build Back Better Act), which was estimated to cost $3.5 trillion, had a much broader understanding of infrastructure encompassing childcare, health provision, and employment opportunities, as well as measures to address climate change. Nonetheless, the measure not only faced Republican opposition, but even though it was to be enacted using reconciliation, thereby preventing Republican filibustering, it was unable to secure backing from key Democrats in the Senate (Diaz 2021).7

”Build Back Better World” Despite its instincts, the Biden administration held back from seeking to resurrect the Trans-Pacific Partnership (TPP), which the Obama administration had seen as the economic lynchpin of its Pivot to Asia, or joining other regional trade agreements. Having said that, it sought make some moves

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through the launch of the Indo-Pacific Economic Framework (IPEF) in May 2022. Its purpose was to begin consultations about agreed standards across the region, particularly in digital trade and trade facilitation, the development of clean energy and decarbonization, supply chain resilience, and anticorruption (Overly 2022). Nonetheless, many Pacific countries were wary and reluctant to commit themselves. The IPEF did not hold out the prospect of a trade agreement that could have provided access to US markets (Sevastopulo and Inagaki 2022). And to draw significant numbers of countries (including India, Vietnam, Indonesia, Thailand, and the Philippines, as well as Japan, South Korea, Australia, New Zealand, Singapore, and Malaysia), it seemed likely that the standards the framework was seeking would have to be lowered (Overly 2022). Nonetheless, with respect to the IPEF and the plethora of other initiatives charted in this book, the efforts to counter the BRI required, as the Trump White House had found, greater heft. The Biden White House therefore turned to the combined influence of the most economically advanced countries. B3W was launched at the June 2021 meeting of G7 leaders. Like nearly all other infrastructure plans based on a leverage model, it promised to unleash far more private capital than the initial injection of public funding. This would create a “values-driven, high-standard, and transparent infrastructure partnership” (White House 2021a). As envisaged, it would not so much develop physical infrastructure in the traditional sense, but instead focus on four areas: climate, health security, digital technology, and gender equality (Crystal 2021; Goodman 2021). Toward the end of the year, Daleep Singh led interagency delegations to Colombia, Ecuador and Panama, and Ghana and Senegal. It was reported that they had identified about fifty potential projects in those countries alone (Powell 2021). All this was followed up at the end of the year when Biden’s secretary of state, Antony Blinken, visited Southeast Asia to promote B3W, which he framed in terms of “freedom” and “openness” (Carrai and Yee 2022). The foundation of B3W was hailed as important as a statement of intent. It formed part of an effort to reassure allies and partners that, after all the uncertainties of the Trump years, the United States would take a leading role in promoting multilateral cooperation and sustainable economic development. It may also put further pressure on the BRI to embrace more sustainable projects. Nonetheless, even a year later, B3W remained scant on detail. The founding communique committed G7 member states to mobilize funding through development institutions, bilateral partnerships, multilateral development banks, and other international financial institutions, but the way in which this would be implemented was uncertain (Crystal 2021). B3W also rested on a leverage model by which government funding would trigger much larger sums of private capital.

134 Countering China A year and a half later, in November 2022, the G-20 gathering in Bali returned to the question of infrastructural development. President Biden, together with Indonesian president Joko Widodo and European Commission president Ursula Von der Leyen, co-hosted a meeting of other G-20 leaders that reaffirmed their joint commitment to the Partnership for Global Infrastructure and Investment (as B3W was renamed) and asserted that the pace of infrastructural investment would be accelerated through projects such as the development of a digital infrastructure across the Pacific region, the Indonesia Just Energy Transition Partnership, and India’s Health Infrastructure. Although the White House announced that governments and other partners were “coming together to finance transformative infrastructure,” that reaffirmation may, in itself, constitute a comment on the failure of the overall initiative launched in 2021 to gather significant momentum (White House 2022).

Summary Although B3W, renamed the Partnership for Global Infrastructure and Investment, was established amid considerable fanfare it faces major obstacles (Scimia 2022). Alongside the other challenges, and these were compounded by the Covid-19 pandemic and the Ukraine war, B3W and other US-backed efforts to foster infrastructural development overseas lack overall credibility. This is partly because infrastructural provision within the United States itself remains in such visibly poor condition and, furthermore, the instability of contemporary US politics can deter other powers from entering into long-term commitments with Washington. Chapter 9 concludes the book by drawing together the many limits and constraints facing successive US administrations and members of Congress. Whatever the strategic imperatives that Chinese ambition and the BRI appear to necessitate, they are bound by state capacities and the legacies of earlier policies.

Notes 1. Calls within the United States for large-scale infrastructural development also corresponded with a shift in thinking, to a degree at least, by international institutions such as the World Bank and the International Monetary Fund (IMF). They have moved their focus away from the pursuit of austerity and reductions in the rate of growth of public expenditure that they pursued from about 2010 and have, instead, increasingly stressed the need for infrastructural development (Abiad, Furceri, and Topalova 2014; Ougaard 2017).

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2. The most well-known and developed high-speed project is the projected 200-miles-per-hour Los Angeles to San Francisco route, under construction in the Central Valley, which has hit persistent challenges. There is a substantial question mark against its viability. 3. There were relatively few signs, particularly in the wake of the 2020 presidential election, that bipartisanship around issues such as these might be possible. But some Democrats took hope from features in the 2017 Tax Cuts and Jobs Act, which sought to curb profit shifting, as evidence that there could be bipartisan action to rein in offshoring by corporations (Hansen 2021). Furthermore, there were also claims there had been a shift in the popular mood. Disapproval of the Tax Cuts and Jobs Act of 2017 outweighed support for the measure (K. Bowman 2019). While there was a wide partisan gap (89 percent of Democrats compared to 55 percent of Republicans), a significant number asserted that the tax system favored the wealthy. Despite the gap, 47 percent of Republicans accepted that corporations pay too little in terms of tax (ABC News/Washington Post 2017). 4. Anxieties about China’s economic prowess therefore seemed to have coalitionbuilding potential, allowing measures to secure cross-partisan backing. It is worth noting that there was a close parallel between the framing of the Biden plans and the Cold War liberal tradition of the mid-century years. That framework, associated with figures such as John Kenneth Galbraith, Arthur Schlesinger Jr., and George F. Kennan, asserted that if the United States was to counter the Soviet threat, it had to enact civil rights legislation, invest in human capital through, for example, education and skills training, and ensure increased economic opportunity for those on the lower rungs of the ladder through federal government interventionism (Brenes and Steinmetz-Jenkins 2021). 5. Although indicators such as total factor productivity are often used as a proxy, competitiveness is, of course, a construction. Indeed, in a celebrated essay, Paul Krugman (1994) challenged the assertion that countries, like firms, can be in competition with each other. 6. Combined with state and local taxes, the statutory rate under the Tax Cuts and Jobs Act of 2017 was 26.5 percent. That placed the United States in line with the Organisation for Economic Co-operation and Development (OECD) average. Trump had initially expressed support for a 15 percent corporate tax rate (J. Jacobs and Kapur 2017; Pomerleau 2018). The 2017 act was based on the premise that a lower corporate tax rate would encourage firms to repatriate their operations and, thus, reduce offshoring. 7. In August 2022, the Senate passed the Inflation Reduction Act, which included elements drawn from the Build Back Better agenda, although it was much smaller in scale. It was largely directed toward climate change, health care provision, and the tax regime for those on higher incomes and corporations (Zandi, Yaros, and Lafakis 2022).

9 The BRI and the Limits of US Power

There is a common refrain in almost all of the commentaries on US efforts to counter the Belt and Road Initiative. Most point to the paucity of government funding for the different initiatives. Jonathan Pollack of the Brookings Institution was one among many in noting: “If we are so troubled by the Belt and Road Initiative (BRI), I would like to see what money, real money, the United States government is prepared to put on the table to counter it. But I don’t see it, and I don’t think people in the region see it” (Pollack et al. 2019: 13). These are more than legitimate comments in that they point to the pivotal role that has to be played by the state, with all its resources and capacities, in processes of infrastructural development. This is because there are significant risks that deter investment by the private sector. At the least, as the early history of railroad construction suggests, extensive underwriting by the state is thereby required. There are general market risks inherent in infrastructure itself, along with broad challenges associated with any given country, as well as the specific risks and barriers that infrastructure development presents within that given country (OECD 2020: 8). As far as general market risks are concerned, infrastructure necessarily requires long-term investment and entails uncertain revenue streams. Initial calculations about development are more often than not undermined by the unexpected demands of geography, or the architecture of incentives and disincentives that governs contract bidding processes. Many of the countries in Eurasia, the Indo-Pacific, Africa, and South America are relatively small and thereby particularly vulnerable to external shocks and, given the character of their industrial structure in many cases, fluctuating commodity prices. Some have weak governance institutions that are prone to capture by particularistic interests or corruption (OECD 2020: 8). 137

138 Countering China Leverage The development model underpinning the efforts of the United States, Europe, and countries such as Japan rests, as the different chapters of this book have noted, on the concept of leverage or financial additionality. In development finance, leverage is understood as “the ability of a public financial commitment to mobilise some larger multiple of private capital for investment in a specific project or undertaking” (Bretton Woods Project 2012: 2).1 There is faith that relatively small sums of public funding (whether provided through concessional loans, securitized finance, grants, or equity) will trigger much larger sums of private capital. Leverage may also include, on top of the “core mobilization” of public money, guarantees, guidance, the provision of technical expertise, and other forms of risk mitigation.2 It is a model that has, in one form or another, won many adherents. President Donald Trump’s infrastructure plan for the United States itself (as announced in February 2018) was, for example, based on the assertion that $200 billion in federal funds could generate $1.5 trillion of infrastructural investment over a ten-year period by leveraging private investment as well as state and local funds (Yglesias 2018). Nonetheless, as this book has suggested, assumptions about the capacity of government to leverage private funding for infrastructure projects should, because of all the uncertainties and barriers that private investors face in this sector, be regarded with caution. There is no assurance, particularly during periods of prolonged crisis, that the initial funding or other forms of support offered by public bodies will be sufficient to trigger large-scale private investment.3 As the Bretton Woods Project rightly noted: “Any headline claims that $x of public money leveraged $y of private investment should be treated with scepticism” (2012: 9). There are other issues. Where there are high leverage ratios, government or other public funding bodies may lose control over the trajectory of a particular project. There is, at the same time, a degree of moral hazard in that a mitigation of market risk can change the overall architecture of incentives and disincentives for private firms (Bretton Woods Project 2012: 10). On top of this, whatever the envisioned quality of an infrastructure project, dangers are still posed by repayment processes and debt when circumstances change.

Institutional Structures and Policy Legacies Nonetheless, the challenges facing infrastructural development plans go beyond the paucity of funding, the unwillingness of many countries to take sides between Washington and Beijing, the widespread lack of faith in the

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international community in the stability of US policy, and the governing assumptions about leveraging. The density of the global institutional landscape should also be considered in that it presents dilemmas for those seeking to undertake further institutional construction. While the international policy landscape is significantly less dense and cluttered than the US domestic policy landscape, those developing projects and initiatives still have to work with, and negotiate their way around, existing institutional structures and policy legacies. In this context, institutional structures are those that shape or set a context for policymaking processes in the domestic and foreign policy arenas. The relationship between the different arenas has been described, in a celebrated account, as a two-level game (Putnam 1988: 433–456). In the United States, as a generalization, the executive branch has much more leeway in the foreign policy arena than in domestic policymaking. Political power is more centralized in the former, and it is fragmented between different levels of government if the latter is considered. The executive has constitutional prerogatives and implied constitutional prerogatives that either the federal courts or simple precedent have established. There are, for the most part, fewer entrenched lobbies and constituencies seeking to bolster their interests. The concept of a policy legacy, which also plays a role in constraining and sometimes empowering actors, has been widely used in the study of welfare state development (Pierson 1996: 153). It is derived from Elmer E. Schattschneider’s celebrated dictum that “new policies create a new politics” ([1935] 1963: 288). When implemented, policies create a framework within which new groupings are likely to emerge and processes of contestation will take place. Some will be beneficiaries while others may be “losers.” Furthermore, path dependence comes into play. Once established, a policy will in all likelihood become entrenched or, as some accounts suggest, sticky over time. Put another way, in many settings, there will be positive feedback effects. Although there may be path-conforming incremental reform, such a policy will be difficult to dislodge or remove (Pierson 2000). If the history of welfare state development is considered, would-be reformers have generally been compelled to build on and accommodate past policies rather than strike out anew. And feedback effects do not stop there. They also include the creation of organized interests, attitudinal shifts as expectations adjust, and changes to the structural character of government (Pierson 1996: 153). A further note should be added. It is tempting to think of institutions and policy legacies across a given region in terms of a web or mosaic. Nonetheless, this can be deeply misleading. Both institutions and legacies take shape at different points in time, in different settings, for different purposes, and amid different configurations of political forces. Each will have its own

140 Countering China distinct logic and tempo (Lieberman 2002: 701). Although there will be periodic compatibilities or “fits,” there will just as probably be disorder and incongruity. Certainly, there can be no a priori presumption of a structured order based on complementarities (Orren 1995: 97).

Policy Legacies and Infrastructural Development Much has been said about the relative weakness, fragility, and sparsity of Asian regional institutions when compared with other regions.4 The abrupt disappearance of the Quadrilateral Security Dialogue (Quad) in its first incarnation after Australia pulled out can be cited as an example (He and Feng 2020: 153). Furthermore, many of the region’s institutions have an ad hoc character. In contrast with Europe, for example, institutionalization takes a thinner rather than a thicker form. The former is where “institutions are functional and instrumental only in facilitating state cooperation and will not penetrate state sovereignty” (He and Feng 2020: 156). Put another way, individual states tend to shape regional institutions, such as the Association of Southeast Asian Nations (ASEAN), rather than institutions playing a significant part in shaping state preferences and development processes. Nonetheless, this line of argument should not be pursued too far. However thin it might be, there is still a distinct and established institutional architecture across the region. That architecture is, however, a patchwork characterized by overlaps between different institutions and loosely coupled institutional sets (Yeo 2019: 162–163). This has significant consequences. First, given that there are multiple institutions with only partially acknowledged hierarchies, there can be a significant degree of uncertainty about the rules and jurisdictions governing particular policy arenas (Yeo 2019: 163). Second, given the thin character of institutions, and in contrast to some other global regions, states make relatively few commitments and can envisage only limited gains when joining a particular institution. This allows them to “veil their preferences” and take ambiguous, or at least imprecise, policy positions (Yeo 2019: 164). This makes policy development and further institution building difficult. Third, the complexities and uncertainties of the Asian institutional frameworks give middle powers scope for maneuver and they may be more ready to act on their own. There are not, China aside, imbalances comparable to those in Europe, where Germany and France hold sway, between countries across Asia. While Japan and India are important powers and, as this book has charted, have at times independently taken infrastructural initiatives of their own, they are far from being hegemonic. Although almost certainly apocryphal, former US secretary of state Henry Kissinger is said to have pointed to fragmentation across the Atlantic by asking the rhetorical question: “Who do I call if I want to call Europe?”

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(Rachman 2009). The Kissinger question can certainly be asked with much greater force about the Asia-Pacific and the Indo-Pacific. Few would dissent from the proposition that the character of institutions and the institutional architecture found in any given setting have important consequences. There are, however, different perspectives on the ways in which they matter. It can be argued that institutions inform the perceptions and preferences of political and economic actors and, thus, contribute to structuring the courses of action that they pursue. Alternatively, they define the context within which individuals, organizations, and countries operate and interact (Campbell 2004: 1). They also structure economic activity (Duina 2011: 5). At the very least, institutions offer cues that create inclinations toward particular types of behavior (Gräbner and Ghorbani 2019: 23). The overall character of the institutional architecture across the Indo-Pacific has thus had important consequences in terms of shaping US policy responses to the BRI. Given the degree of underinstitutionalization, the thin or weak character of the institutions that have developed, their patchwork complexity, and the leverage afforded to smaller states, US strategy was consequently hesitant, variegated, and multifaceted. If the records of the Donald Trump and Joe Biden administrations are taken together, US policy across Asia had five defining components: It rested on the construction of new institutions, the co-option of established international organizations based outside of Asia, institutional resurrection, institutional stacking, and specific bilateral arrangements with individual countries. Each will be considered in turn. One of the newly created institutions was, as charted in Chapter 6, the Indo-Pacific Business Forum (IPBF), which was first launched at the end of July 2018 and then, although the pandemic took a toll on in-person gatherings, met annually (Meisburger 2018). By 2021, it involved the US Trade and Development Agency, the Department of State (and over ten other government agencies), a range of Indian peak business organizations, and the US-ASEAN Business Council (Indo-Pacific Business Forum 2021). The first forum spawned three further institutional clusters: the Digital Connectivity and Cybersecurity Partnership, Asia Enhancing Development and Growth through Energy (Asia EDGE), and the Infrastructure Transaction and Assistance Network (ITAN). They were, it was announced, backed by $113 million in immediate funding (Meisburger 2018). At the same time, and this was more a feature of the Biden than the Trump administration, the United States sought to co-opt established institutions from outside the region. They had a strength, resilience, and legitimacy that the United States or its immediate allies and partners lacked. Thus, during the first year of the Biden presidency, and also at the request of Japan and Australia, the Organisation for Economic Co-operation and Development (OECD) took over the coordination of technical support for

142 Countering China the Blue Dot Network, although it had originally been created as a selfstanding initiative (OECD 2022). There was also what can be called “institutional resurrection.” Japan, the United States, Australia, and India originally established the Quadrilateral Security Dialogue as a form of ad hoc institutionalization in response to the 2004 tsunami in the Indian Ocean (He and Feng 2020: 156). The Quad, however, fell away. Even after its resurrection (and despite occasional complaints about overbureaucratization and the plethora of working parties that had been generated), it has remained underinstitutionalized. It is therefore vulnerable to events and exogenous shocks. At the same time, there has also been institutional stacking. This is a process by which the purpose and scope of an institution do not change in terms of their overall trajectory or character, but are simply enlarged through the addition of new functions and mandates.5 This has been seen in the efforts to develop the Free and Open Indo-Pacific (FOIP) and attempts to bolster the Quad so as to take on new initiatives in infrastructural development and other fields. Finally, there have been bilateral initiatives. Like the BRI, US infrastructural efforts have relied on the conclusion of bilateral Memorandums of Understanding (MoUs) with individual countries. Such MoUs are statements of intent and as such are, if institutional strength is considered, weak. The MoU concluded between the United States and South Korea in October 2019 is illustrative. It described itself as “a cooperative initiative designed to support infrastructure development in the Indo-Pacific region through marketoriented, private sector investment. . . . The engagement supports the broader US Government Indo-Pacific Strategy by complementing ongoing efforts under the Enhancing Development and Growth through Energy (Asia EDGE) and Infrastructure Transaction and Assistance Network (ITAN) initiatives” (US Department of the Treasury 2019).

Policy Abandonment Feedback A further point should be added. The literature considering policy legacies has inevitably concentrated on the effects of a particular law, treaty, or regulatory mechanism. In some settings, however, the failure or abandonment of a policy can also trigger feedback processes. Put another way, and to adapt Schattschneider’s phrase, the abandonment of a policy can also create “new politics,” in that there is a changed architecture of incentives and disincentives that will shape the perceptions of actors and their subsequent courses of action (Schattschneider [1935] 1963: 288). The withdrawal of the United States from the Trans-Pacific Partnership (TPP) in January 2017, just days after Trump took office, should be seen in

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this way. It may well have been doomed anyway because Hillary Clinton, who had hailed it in 2012 as setting the “gold standard in trade agreements,” abandoned it herself (Memoli 2016). Once she hit the presidential campaign trail in 2015, and just two days after the Barack Obama administration had secured the agreement with eleven other Pacific Rim nations, Clinton declared that it did not meet the “high bar” that she had set for it (G. Palmer 2016). Given the mood swing against trade liberalization and the perceived effects of the North American Free Trade Agreement (NAFTA) and trade with China on US manufacturing employment, there was little chance of the TPP winning majorities in Congress. Once President Trump had withdrawn the United States, the TPP baton was picked up by Japan, which led the remaining partner countries toward the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which took effect at the end of 2018. It established a free-trade zone covering about 500 million people. The TPP had been advanced by the Obama White House hand in hand with the Pivot to Asia as a way of establishing trade rules that it favored across the Pacific region rather than allowing growing trade relations with China to establish Chinese rules by default. The United States’ withdrawal not only limited the prospects of securing this, but appeared to signal that the United States was turning away from engagement with Asia. The abandonment of an institution that had been a policy cornerstone thereby weakened the already fragile institutions that the Trump administration sought to establish in countering the BRI. Indeed, against this background, China secured more of a regional economic role by joining with Japan, South Korea, Australia, New Zealand, and ASEAN to found the Regional Comprehensive Economic Partnership (RCEP) in November 2020.

State Structures and Capacities As noted above, infrastructural development processes, whether at home or overseas, are heavily dependent on the state and its capacities. The American state faces particular impediments. The disorganization of the Trump White House has been widely noted. The president’s personality, tensions between different individuals and factions, the slow rate of recruitment, and the high level of staff turnover combined to hobble the policymaking process. When Rex Tillerson, Trump’s first secretary of state, made his first visit to Beijing in March 2017, he simply repeated official Chinese statements verbatim by stating that the United States was “ready to develop relations with China based on the principle of no conflict, no confrontation, mutual respect, and win-win cooperation” (Huxley and Schreer 2017: 83– 84). Reportedly, this happened because of the slow pace at which senior

144 Countering China administration officials were appointed and Tillerson was insufficiently prepared for the occasion. Nonetheless, the issues of American state capacity and its ability to respond to policy challenges go far beyond the idiosyncrasies of President Trump and his administration. As some studies of American political development (APD) have argued, the American state has structural incapacities. Why is this? The American state is not only defined by a separation of powers, but also by byzantine relationships, overlapping jurisdictions (often expressed in interagency tensions), a significant degree of institutional porosity (e.g., through lobbying exposing government to the demands of particularistic interests), uncertain and cross-cutting lines of authority, high rates of turnover among political appointees, and a lack of professional expertise (L. R. Jacobs and King 2009: 11–13). In a historical account, Stephen Skowronek has described it as “a hapless confusion of institutional purposes, authoritative controls, and governmental boundaries” (1982: 287). This has left a legacy. For their part, Desmond King and Lawrence Jacobs refer in a contemporary study to: “the administrative state’s generally porous, easily penetrated boundaries; its consistent (though not uniform) lack of independent expertise to independently assess and respond to the behavior of markets and individuals; and multiple and competing lines of authority that stymie even necessary intervention” (2010: 798). In sum, despite its size, the federal state has only limited capacity and constrained resources. Some elements of the US infrastructural efforts considered in this book reflect these state characteristics. Despite the centralization efforts incorporated within the Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act), infrastructure activities are spread across the US International Development Finance Corporation (IDFC), the Office of Development Finance within the State Department, the Department of Agriculture, the US Treasury, the Export-Import Bank of the United States and Trade and Development Agency (TDA), the interagency Infrastructure Transaction and Assistance Network, the Transaction Advisory Fund, the US Agency for International Development (USAID), the Bureau of Global Public Affairs, and the Global Engagement Center (GEC) (US Department of State 2022; Norris 2021: 110; Stilwell 2020). Furthermore, emerging economies engaging with US-backed efforts may have to deal with different government agencies as well as work separately with finance companies and construction firms. In contrast, despite all its uncertainties, the BRI has an embedded advantage: “China’s primary advantage in infrastructure diplomacy lies in its one-stop-shop package of project finance, insurance, and construction for developing nations. Furthermore, recent polls indicate that many ASEAN residents support China’s activities, a sign that they might be less enticed by aspirational soliloquies about democracy and more

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concerned with building usable roads, bridges, and airports” (Carrai and Yee 2022). On top of this, it is worth noting that Chinese firms have built up long experience that began well before the formal inauguration of the BRI in infrastructure construction overseas, either through commercial contracts or through foreign aid. China’s state-backed loans are less costly than the shorter-term and higher-cost private funding offered by Western sources. The BRI thus has a comparative advantage in terms of turnover time and cost (Chaziza 2021). Furthermore, the structural weaknesses of the American state extend beyond its organizational structures. The gap between the United States’ ambitions for the Indo-Pacific and the resources that it has assigned has been repeatedly noted in the book. Even if those ambitions are scaled back to checking rather than countering the BRI or shifting the character of the terrain on which it operates, the resources that the United States can command appear limited. There have also been suggestions that, should domestic policy considerations at some point require the forms of budget cutting that were imposed by the 2010 Budget Control Act, the capacity of the United States in the Indo-Pacific will be further restricted (L. W. Ford 2020). To this, of course, can be added the demands that may be made because of developments and processes in other regions of the world. The Russia-Ukraine war has made this only too evident.

Playing Both Sides It is easy to suggest or imply in discussions of development that recipient countries are passive victims that lack any form of agency. Those engaging with the BRI should not be depicted, even implicitly, in this way. Certainly, they are often in a relatively weak bargaining position, but they still have some choices open to them and a degree of leverage. Some nations may, for example, adopt a game-based strategy and turn to the BRI, not out of conviction or faith in China, but in the hope of eventually securing funding from the Western powers or, alternatively, Japan or Australia. It has been argued that some Pacific Island nations have leveraged Chinese aid and the BRI to change “Australia’s engagement in ways that, from their perspective, are net gains for the region” (Bisley et al. 2022: 148). Or, given that countries are being courted by the BRI and the different USbacked projects, the most rational option could well be to engage with both rather than choose between them (Chaziza 2021). Such a strategy would limit the chances of countries becoming overdependent on one source or nation. Vietnam has been cited as an example as it is reportedly

146 Countering China welcoming funding from the US-backed initiatives as well as the BRI (Borton 2020). Furthermore, because Build Back Better World (BW3) was seeking to address climate change, health security, digital technology, as well as gender equality, it was moving into areas and sectors where, despite the initiatives spawned by the BRI such as the Digital Silk Road and the Health Silk Road, the BRI was relatively underdeveloped. This adds to the reasons why there may well be incentives for emerging economies to explore both BRI and B3W projects at the same time.

Prospects These challenges severely limit the capacity of the United States as well as its allies and partners to counter the BRI. Having said all of this, the initiative itself is not static in character nor unresponsive to pressures from within and outside of China. Indeed, processes of pullback and reconfiguration are getting under way (Pascha 2020). While there has been considerable controversy about the methodologies underpinning the analyses, and debate about the turning point, China’s overseas infrastructure lending appears to have been declining from 2016 or 2017 onward (Kynge and Wheatley 2020; Mingey and Kratz 2021). It was reported, for example, that there were no new BRI investments in Russia during the first half of 2022. There have also been suggestions that the BRI is no longer being trumpeted in China in the ways that it had been when it was heralded as “the project of the century” (White 2022). Why has this happened? There have been debt repayment issues not only in Sri Lanka, but also in Pakistan and Venezuela. There have also been renegotiations in, for example, Malaysia, Myanmar, and Russia. One estimate suggests that $52 billion of loans had to be renegotiated in 2020 and 2021. Even before 2022 the economic viability of the railway routes that constitute the overland Eurasian Belt, which had formerly been heralded as the shape of things to come, had been put in doubt. Where debt burdens have become impossible, and in some cases there have been threats of sovereign defaults, Chinese institutions have had to step in with rescue loans. The affected countries reportedly include Pakistan, Argentina, Belarus, Egypt, Mongolia, Nigeria, Turkey, Ukraine, and Sri Lanka (Kynge et al. 2022). Furthermore, regulatory structures have been tightened in China itself and the authorities have had to shift resources to support Covid-19 lockdowns and domestic stimulus measures (Mingey and Kratz 2021). China’s foreign exchange reserves have dwindled since 2014. The turn to a “dual circulation” strategy aimed at reducing China’s dependence on overseas markets and imported technology will also have implications

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for the BRI (Kynge and Wheatley 2020). Furthermore, the war in Ukraine has placed a big question mark against the future prospects for Eurasian connectivity. There also are already signs that the globalizing processes that were unleashed at the beginning of the 1990s are either being brought to a juddering halt or being changed in character. Alongside pullback, there is also some evidence of reconfiguration. There are some signs of a geographical reorientation toward the Middle East. During the first six months of 2022, substantial BRI contracts were concluded in Saudi Arabia and Iraq (White 2022). There may, at the same time, be a greater emphasis on sustainability not just because of Western criticism, but also because China is moving up the value chain (Nagy 2021). The spawning of new silk roads around health or digital connectivity projects, whether branded as being within the BRI or not, may well “crowd out” traditional forms of infrastructure (Nagy 2021: 17).

Shifting Across the Political Terrain Although the BRI appears to be shifting in character, it continues to structure and shape the relationship between the United States and China. Questions about the character of the US policy response therefore persist. Given the challenges, it has been argued that the United States will prove unequal to the task of challenging or countering the BRI itself. The United States not only faces the obstacles charted in this book but, given its own domestic record on infrastructural development, it cannot compete globally on this terrain. It therefore has to shift the locus of competition. From this perspective, the United States should take steps to facilitate the provision of technology, health care, and education where, despite increasing challenges around the first of these, the United States still has competitive advantages when compared to China (Carrai and Yee 2022). Another shift seems to have already begun. Indeed, the belief that the United States had to respond to the rise of China and the BRI by bolstering its own economic competitiveness increasingly became a new common sense. While for some that rested on the unleashing of market forces and, as a corollary, smaller forms of government, others looked toward some form of industrial policy (although that term is eschewed by many), whereby government plays a role in channeling investment and backing strategically important sectors. There are many obstacles facing those who call for greater federal government interventionism or back something akin to the East Asian economic development model, which is based on state-led investment. Nonetheless, the growing sense of competition with China, and in particular fears about

148 Countering China China’s move into advanced technologies, has enabled policies that would in other circumstances have been disregarded to secure a hearing. The 2017 National Security Strategy issued by the Trump administration had pointed the way toward an industrial policy by declaring: “The United States will pursue an economic strategy that rejuvenates the domestic economy, benefits the American worker, revitalizes the US manufacturing base, creates middle-class jobs, encourages innovation, preserves technological advantage, safeguards the environment, and achieves energy dominance. Rebuilding economic strength at home and preserving a fair and reciprocal international economic system will enhance our security and advance prosperity and peace in the world” (White House 2017: 18). In the same spirit as the strategy, a task force established by the Council on Foreign Relations to consider the BRI emphasized that a US answer to the BRI should include increases in funding for federal research and development; adding to investment in science, technology, engineering, and mathematics (STEM) education; and the reform of government agencies to assist sectors with growth potential. It concluded that “a United States beset by internal problems that is unable to both compete and set an example will be unable to offer an alternative to BRI” (Lew et al. 2021: viii). There were some moves within Congress. Taken together, the Strategic Competition Act of 2021 and the US Innovation and Competition Act (USICA) that were under consideration in Congress during 2021 sought to add to the powers of the Committee on Foreign Investment in the United States (CFIUS), prioritize the US military presence in the Indo-Pacific, strengthen ties with Taiwan, and emphasize human rights. Competition with China also provided a basis for the pursuit of industrial policy within the United States, whereby government would play a pivotal role in boosting fifth-generation (5G) technology, developing semiconductors, and securing the regionalization of technology hubs (Weissmann 2021). These and other measures, including the America COMPETES Act of 2022, which sought to foster more scientific and technological innovation, paved the way for passage of the CHIPS and Science Act in July 2022. Despite claims by some that it constituted corporate welfare or pork-barrel politics, the act provided subsidies and investment tax credits totaling $280 billion for US semiconductor production (C. Weaver 2022). Having said this, the CHIPS and Science Act was the production of an alignment between fears about growing Chinese technological prowess, concerns about the vulnerability of chip supplies given the high proportion of chips manufactured in Taiwan, protectionist sentiments, and the shift away from the free-market fundamentalism that had characterized the Republican right in earlier decades. Given the institutional constraints that define the US political process, there is a question mark against the likelihood that this venture into industrial policy will be widely replicated.

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Given these dilemmas, what then are the overall prospects for the United States’ policy responses to the BRI? This book has argued that US efforts have, for the most part, been limited, fragmentary, and underfunded. Paradoxically, however, some of the US policy goals in terms of countering the BRI may yet come to fruition in that the initiative is being reconfigured and is shifting away from hard forms of infrastructure. This will probably be hailed as a victory by those in the United States who see the US-China relationship in zero-sum terms. There is, however, a sting in the tail for the West. If there is a shift in the political terrain on which US-China competition takes place and it does indeed move toward digital connectivity, artificial intelligence, and other forms of new technology, the United States may well find itself on the losing side.

Notes 1. The leverage model rests on an underlying assumption that, without such funding and initiatives, the private sector would not have invested in a particular project (see Chapter 8). 2. This is open to argument, particularly because there are methodological challenges in calculating whether or not a particular investment might have taken place anyway. If that was indeed the case, it could reasonably be concluded that private investors leveraged government funding for the World Bank rather than vice versa (Bretton Woods Project 2012: 5). 3. Similar questions have been asked about the capacity of European Union (EU) infrastructural plans to crowd in and leverage private investment. For instance, the Juncker Investment Plan for Europe (see Chapter 7) sought to use €21 billion of EU guarantees to leverage €315 billion of private investments (a factor of 15). On the other hand, it was forecast that Global Gateway (see Chapter 7) would employ €40 billion of EU guarantees to generate €135 billion of private investment (a factor of 3.4) (Tagliapietra 2021). 4. It is generally assumed that international institutions are necessarily weaker, particularly in terms of enforcement, than their domestic counterparts. Furthermore, informal institutions have less capacity than those that are formal. The costs of entry and exit, as well as adherence or nonadherence to decisions, will generally be lower. It has, however, been argued that, although thinner, they still have sufficient stability and thickness to generate feedback effects (Zürn 2016). 5. There is a difference between stacking and layering. Stacking is a concept used in much of the literature considering incremental forms of institutional change. Layering describes processes by which there is, over time, a transformative change in the character of an institution (Mahoney and Thelen 2010). In other words, unlike stacking, layering is inherently subversive.

Acronyms

AAGC ACOBORI ADB AfCFTA AGOA AIIB ANZUS APD APEC ARIA ASEAN Asia EDGE AUKUS BDI BDN BRI B3W BUILD Act CAI CCP CDB CEE CEOs CFIUS China EXIM CO2

Asia-Africa Growth Corridor Australia-China One Belt One Road Initiative Asian Development Bank African Continental Free Trade Area African Growth and Opportunity Act Asian Infrastructure Investment Bank Australia, New Zealand, and the United States American political development Asia-Pacific Economic Cooperation Asia Reassurance Initiative Act Association of Southeast Asian Nations Asia Enhancing Development and Growth through Energy Australia, the United Kingdom, and the United States Bundesverband der Deutschen Industrie e.V. Blue Dot Network Belt and Road Initiative Build Back Better World Better Utilization of Investments Leading to Development   Act of 2018 EU-China Comprehensive Agreement on Investment Chinese Communist Party China Development Bank Central and Eastern Europe chief executive officers Committee on Foreign Investment in the United States Export-Import Bank of China carbon dioxide 151

152 Acronyms CPEC CPTPP CRG CSP DCA DCCP ECG EIB EPI EPQI EU FDI FIRRMA 5G FOIP FPA FRC GDP GEC G7 G-20 IDFC IMF INSTC IPBF IPEC IPEF ITA ITAN JBIC LNG MoUs NAFTA NATO NDAA NGOs OBOR OECD OMB OPIC PCAOB PDI

China-Pakistan Economic Corridor Comprehensive and Progressive Agreement for   Trans-Pacific Partnership China Research Group Center for Security Policy Development Credit Authority Digital Connectivity and Cybersecurity Partnership Executive Consultation Group European Investment Bank Economic Policy Institute Expanded Partnership for Quality Infrastructure European Union foreign direct investment Foreign Investment Risk Review Modernization Act fifth-generation (technology, etc.) Free and Open Indo-Pacific foreign policy analysis Family Research Council gross domestic product Global Engagement Center Group of 7 Group of 20 International Development Finance Corporation International Monetary Fund International North-South Transport Corridor Indo-Pacific Business Forum Indo-Pacific Economic Corridor Indo-Pacific Economic Framework International Trade Administration Infrastructure Transaction and Assistance Network Japan Bank for International Cooperation liquefied natural gas Memorandums of Understanding North American Free Trade Agreement North Atlantic Treaty Organization National Defense Authorization Act nongovernmental organizations One Belt One Road Organisation for Economic Co-operation and Development Office of Management and Budget Overseas Private Investment Corporation Public Company Accounting Oversight Board Pacific Deterrence Initiative

Acronyms

PEPFAR PLAN PNTR PQI PSU R&D RCEP RMB SCO SEC STA-1 STEM TDA TICAD VI TPP USAID USICA USMCA WTO

President’s Emergency Plan for AIDS Relief People’s Liberation Army Navy permanent normal trade relations Partnership for Quality Infrastructure Pacific Step-up research and development Regional Comprehensive Economic Partnership renminbi Shanghai Cooperation Organisation Securities and Exchange Commission Strategic Trade Authority Tier 1 science, technology, engineering, and mathematics Trade and Development Agency sixth Tokyo International Conference on   African Development Trans-Pacific Partnership US Agency for International Development US Innovation and Competition Act United States-Mexico-Canada Agreement World Trade Organization

153

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Index

Abe, Shinzo, 36, 87–89, 94, 115 Act East, 94, 156 Afghanistan, 14, 16, 20, 42, 56, 85, 90, 94, 114 America First, 30, 56–57, 104, 169–170 American Jobs Plan, 127, 129–132, 168, 178 American political development, 9, 144, 151, 158, 170 Asia Enhancing Development and Growth through Energy (Asia EDGE), 99, 102, 141–142, 151, 177 Asia-Africa Growth Corridor (AAGC), 94, 151, 170 Asia-Pacific, 16, 20–21, 35–36, 41, 43, 67, 99, 141, 151, 165, 175–177 Asia-Pacific Economic Cooperation (APEC), 43–44, 67, 99, 151 Asian Development Bank (ADB), 54, 89, 151 Asian Infrastructure Investment Bank (AIIB), 2, 5–6, 41, 43, 50, 80, 102, 104, 110, 151, 156 Association of Southeast Asian Nations (ASEAN), 18, 20, 35, 42, 77–78, 80, 92, 97, 99, 102, 115, 119, 140–141, 143–144, 151, 170, 176 AUKUS, 98, 124, 151, 158, 166 austerity, 60, 83, 106, 119, 134, 174 Australia, 20, 22, 35–36, 77–78, 92, 94– 98, 100–102, 114, 124, 133, 140–143,

145, 151, 156, 159, 162, 164, 167, 172, 174–175, 177, 179 Baghdad, 5, 45 Bangladesh, 47, 90, 92, 94, 100 Bannon, Steve, 46 Belt and Road Forum, 42, 63, 91, 94, 105–106, 120, 162, 168 Belt and Road Initiative (BRI), 2–7 22–23, 36, 38–39, 41–61, 63, 67–75, 77–81, 83–85, 87, 89–93, 95–97, 99– 101, 103–125, 127, 130, 133–134, 137, 139, 141–149, 151, 156–159, 161–169, 172–179, 181 Berlin, 5, 45, 109, 111, 158, 166 Better Utilization of Investments Leading to Development Act (BUILD Act), 4, 59, 63, 67–73, 75, 77, 87, 111, 127, 144, 151, 160, 165, 173 Biden, Joe, 2, 7, 11, 34–35, 38, 75, 79– 81, 83, 97, 100–102, 116–117, 124, 127, 129–135, 141, 157, 161–164, 166–167, 169–171, 173, 177–178 Blinken, Antony, 133 Blue Dot Network (BDN), 11, 44, 55, 59, 74-75, 77-85, 87, 99, 127, 142, 151, 157, 170, 173, 175–176 Bolton, John, 71, 73, 178 Brexit, 117–118, 122–124 Brookings Institution, 137, 155, 158, 160–162, 165, 171, 173

181

182 Index Build Back Better Act, 132, 161 Build Back Better World (B3W), 11, 81, 115, 121, 127, 132-134, 146, 151, 158-160, 171, 178 Bundesverband der Deutschen Industrie e.V. (BDI), 111–112, 151, 158 Bush, George W. 13–19, 32, 37–38, 62, 92, 157, 162–163, 172–173, 177 Cameron, David, 118 Canada, 68, 104, 123, 153 Canberra, 20, 95–96, 156 Cato Institute, 39, 158 Center for Security Policy (CSP), 34, 45–46, 152, 158, 169 certification, 75, 77, 79, 81–82, 85, 170, 172 Charlevoix Commitment on Innovative Financing for Development, 78, 159 China, 1–11, 13–39, 41–64, 66–72, 74– 84, 86, 88–100, 102–125, 127–128, 130–132, 134–135, 138, 140, 142– 149, 151–152, 155–179, 181 China Research Group, 122, 152, 159 China-Pakistan Economic Corridor (CPEC), 54, 93, 112, 152 CHIPS and Science Act (2022), 117, 148, 177 Chinese Communist Party (CCP), 4, 33, 35, 36, 46, 63, 151 City of London, 120, 159 Clinton, Bill, 1, 13, 15–16, 23, 28, 131, 157 Clinton, Hillary, 6, 20, 35, 88, 143, 161, 168, 170 Club for Growth, 27 Committee on Foreign Investment in the United States (CFIUS), 25, 116, 148, 151, 165-166 Committee on the Present Danger: China, 46 connectivity, 3, 5, 22, 36, 42, 44, 47, 51– 52, 59, 71, 78, 85, 87, 89–90, 92, 94, 97, 99–100, 102, 104–107, 113–115, 117, 119, 122, 125, 141, 147, 149, 152, 162–163 containment, 14, 16, 32, 45, 96, 112, 161 Conte, Giuseppe, 107 COSCO, 107, 124 Council of Economic Advisers, 130 Covid-19, 5, 49, 51, 56, 64, 81, 96, 98, 117, 124–125, 129, 134, 146, 168

decoupling, 25, 32–33, 39, 112, 158, 175 deglobalization, 117 Democrats, 13, 18, 27–28, 33, 123, 128, 130, 132, 135, 161 Deng, Xiaoping, 1 Department of Foreign Affairs and Trade of Australia, 78 Department of State, 21, 42, 63, 77, 79– 80, 89, 94, 141, 144, 176 Development Credit Authority (DCA), 67–70, 152, 161, 177 Diaoyu (Senkaku) islands, 37 Digital Connectivity and Cybersecurity Partnership (DCCP), 99, 141, 152 Digital Silk Road, 146, 172 Draghi, Mario, 125 Economic Policy Institute (EPI), 24, 152, 173 economic power, 23, 39, 59–60, 82–83, 85, 117, 177 Elements for a New EU Strategy on China, 114, 162 Equator Principles, 78, 161 EU-China Comprehensive Agreement on Investment (CAI), 116, 125, 151 EU-China Connectivity Platform, 104, 113 European Union (EU), 11, 54, 56, 76, 78, 103–117, 123-125, 149, 151–152, 158–163, 167–172, 177 European Union Chamber of Commerce in China, 78, 114, 116, 162 European Investment Bank (EIB), 107, 152, 162 European Union (EU), 11, 54, 56, 76, 76, 78, 103–117, 123–125, 149, 151–152, 158–163, 167–172, 177 Export-Import Bank of the United States, 144 Family Research Council (FRC), 27, 152 feedback, 7, 9, 16–19, 23–24, 37, 52, 55, 139, 142, 149, 156, 168, 171, 177 fifth-generation (5G) (technology, etc.), 5, 96, 122, 125, 148, 152 financial crisis (2008), also global financial crisis, 3, 18, 22, 106, 130, 157, 169 fiscal policy, 83 Five Eyes, 95

Index Five Star movement, 107 foreign aid, 57, 61, 63, 65–66, 145 foreign direct investment (FDI), 24, 95 Foreign Investment Risk Review Modernization Act (FIRRMA), 25, 35, 152 foreign policy analysis (FPA), 9, 152, 155 Free and Open Indo-Pacific (FOIP), 32, 36, 44, 59, 89–92, 142, 152, 160, 165–166, 168, 170, 176, Fox News, 13, 88 France, 75, 110, 124–125, 140, 155 Freedom Caucus, 66 Genoa, 107 Germany, 5, 7, 105, 111–113, 125, 140, 159, 165, 173 Global Britain, 121, 123, 164, 177 Global Engagement Center (GEC), 144, 152 global financial crisis, 18, 157 Global Gateway, 115–116, 149, 175 global warming, 96 Great Recession, 105, 108, 174 Greece, 105–110, 124–125, 159–160, 169 green Silk Road, 5, 53 Group of 7 (G7), 11, 56, 78, 81, 91, 107, 121, 127, 133, 152, 157, 159–160, 163, 173, 178 Group of 20 (G-20), 91, 134, 178 GEC, 144, 152 Global Engagement Center, 144, 152 global financial crisis (2008), 18, 157 Global Gateway, 115–116, 149, 175 global warming, 96 green Silk Road, 5, 53 Hainan Island incident, 38 Hambantota International Port, 47, 50, 54 Hammond, Philip, 118 Health Silk Road, 5, 64, 146 Heritage Foundation, 27, 34, 45, 48, 62, 66, 71, 165, 174 high-speed rail, 128, 160, 169 historical institutionalism, 7–8, 10, 179 Hu, Jintao, 21, 88, 165 Hudson Institute, 34, 39, 45, 160 Hungary, 105, 108–110, 125 India, 23, 35–37, 48, 50, 54, 59, 79, 92– 94, 96–97, 99–102, 114–115,

183

133–134, 140, 142, 156–157, 159, 163, 166, 168, 170, 173–174 India-US Strategic and Commercial Dialogue, 37 Indian Ocean, 3, 20, 22, 36, 48, 92, 142 Indo-Pacific, 2, 9, 11, 31–32, 35–37, 42– 44, 57, 59, 68, 70, 77–78, 85, 87, 89–91, 93, 95, 97–102, 104, 115, 121, 123–124, 133, 137, 141–142, 145, 148, 152, 159–160, 162–165, 167– 170, 172, 174–177, 179 Indo-Pacific Business Forum (IPBF), 77, 98–99, 141, 152, 165, 167, 170, 176 Indo-Pacific Economic Corridor (IPEC), 35, 42 Indo-Pacific Economic Framework (IPEF), 102, 133, 152, 163 Indonesia, 11, 91, 100, 114, 133–134 Indonesia Just Energy Transition Partnership, 134 industrial policy, 26, 88, 112–113, 117, 147–148 Inflation Reduction Act, 135, 179 Infrastructure Transaction and Assistance Network (ITAN), 96, 99–100, 141– 142, 144, 152 International Monetary Fund (IMF), 47, 50, 62, 134, 152, 155 International North-South Transport Corridor (INSTC), 94, 152 investment screening, 110, 116, 122 Iraq, 56, 90, 147 Ise-Shima Principles, 91 Italy, 63, 105–108, 110, 125, 155, 157– 158, 164, 172 Japan, 20, 35–36, 44, 47, 51–52, 54, 59, 62, 68, 77–78, 87–94, 96–98, 100– 102, 110, 114–115, 125, 133, 138, 140–143, 145, 152, 155, 157–159, 162, 164–168, 170–175, 178 Japan Bank for International Cooperation (JBIC), 78, 97, 152 Johnson, Boris, 14, 118, 120, 122, 125, 129, 160–161, 165 Juncker, Jean-Claude, 113, 149 Katainen, Jyrki, 105, 115, 162 Kelly, John F., 31 Kerry, John, 42, 161 Kim, Jong Un, 88, 101

184 Index Kissinger, Henry, 34, 39, 45, 140–141, 167, 172 knowledge regime, 10, 34, 44–45, 63 Laos, 48–49, 52, 100, 128 layering, 8, 149 leverage, 10, 14, 22, 45, 48–49, 53, 60, 62, 69, 72–73, 75, 79, 83, 85, 95, 110, 116, 119, 122, 125, 133, 138, 141, 145, 149 liquified natural gas (LNG), 108, 152 Macron, Emmanuel, 103, 106 Made in China 2025, 26, 111, 158 Maritime Silk Road, 11, 22, 54, 161, 175 Marshall Plan, 3, 11, 49 Mattis, Jim, 31–33, 43, 59, 62–63 May, Theresa, 103, 118, 120, 177 McMaster, H. R., 31 Mnuchin, Steve, 31 Mediterranean, 125, 162 Memorandum of Understanding (MoU), 55, 95, 98, 104, 107–108, 110, 113, 115, 120–121, 125, 142, 152 Merkel, Angela, 103, 106, 111 Modi, Narendra, 37, 79, 93–94, 100–102, 171 Mogherini, Federica, 113–114 Montenegro, 49, 108, 124 Morrison, Scott, 95–96, 100 Mulvaney, Mick, 66 National Defense Authorization Act (NDAA), 37, 152 National Security Strategy, 3, 19, 31, 35, 43, 57, 61, 90, 148, 171, 177–178 New Silk Road initiative, 42 New Zealand, 20, 98, 133, 143, 151 Nixon, Richard 16, 34, 45, 69, 128, 163, 169, 171 North American Free Trade Agreement (NAFTA), 123, 143, 152 North Korea, 14, 21, 27, 31, 38–39, 41, 88, 94, 175 Northern Powerhouse, 119, 156 Nye, Joseph, 59–61, 83–84, 166, 169 Obama, Barack, 2–3, 13–14, 19–22, 28, 32, 35, 37, 39, 41–42, 61–62, 75, 80, 110, 128, 130, 132, 143, 157, 159– 160, 166–167, 177

One Belt One Road (OBOR), 3, 95, 151–152, 160 Organisation for Economic Co-operation and Development (OECD), 11, 22, 49, 80–81, 83–84, 127, 135, 137, 141–142, 152, 161, 169–170, 177, 179 Overseas Private Investment Corporation (OPIC), 57, 66–70, 97, 152, 161, 173 Pacific Deterrence Initiative (PDI), 37, 152 Pacific Step-Up (PSU), 96, 98, 153, 174 Pakistan, 47, 49, 54, 79, 93–94, 112, 114, 146, 152 Pakistan-occupied Kashmir, 54, 93 pandemic, 5, 49, 51, 56, 64, 81, 98, 100, 117, 124–125, 129, 134, 141 Papua New Guinea, 97–98 Partnership for Quality Infrastructure (PQI), 89, 152–153 Paulson, Hank, 18–19, 33, 163, 169, 171 Pence, Mike, 31, 43–44, 98, 175 Permanent normal trade relations (PNTR), 1, 15, 23, 27, 153 Philippines, 20, 100, Piraeus, 107, 109, 124 Pivot to Asia, the Pivot, 20–22, 38, 46, 80, 132, 143, 159, 179 Polar Silk Road, 5, 53 policy banks, 4, 55, 105 policy legacies, 7–8, 56, 117, 138–140, 142 Pompeo, Mike, 31, 36–37, 39, 45, 89, 92, 99, 110, 122, 155, 163, 171–172 populism, 30, 39, 128, 174 Portugal, 106, 108, 124–125, 179 Pottinger, Matthew, 42 principled realism, 56–58, 161 Progressive Agreement for Trans-Pacific Partnership, 125, 143, 152, 176 Prosper Africa, 44, 59, 63, 65, 67, 69–73, 75, 87, 160 Putin, Vladimir, 104 Quadrennial Defense Review Quadrilateral Security Dialogue (Quad), 36-37, 55, 92, 96–98, 100–102, 140, 142, 160, 163-164, 166–168, 170– 171, 174–175, 177–178 realism, 6, 56–58, 65, 157, 161, 165 rebalancing, 19–20, 32

Index Regional Comprehensive Economic Partnership (RCEP), 74, 93, 143, 153 relational leverage, 45 Renminbi (RMB), 14, 17–19, 21, 39, 50, 153 Republicans, also Republican Party, 27– 28, 33, 38, 66, 123, 130, 132, 135 Romer, Christina 130 Ross, Wilbur 99 Rotterdam, 107 Rubio, Marco 33, 79, 173 Rumsfeld, Donald 16 Russia, 16, 19, 47, 61, 93–94, 114, 119, 145–146, 177 Saudi Arabia, 147 Scarborough Shoal, 20 Schattschneider, Elmer E. 139, 142, 173 Schumer, Chuck 13, 17, 33, 158 Securities and Exchange Commission (SEC), 35, 153 Senkaku (Diaoyu) islands, 37 Serbia, 4, 108 Shanghai Cooperation Organisation, 93, 102, 153 Shangri-La Dialogue, 32, 94 Shenzhen, 3 Silk Road Economic Belt, 11, 22, 53–54 Sines, 108, 124, 177 soft power, 33, 44, 58–62, 65, 67, 70, 83–86, 158, 165, 169, 172–173, 177– 179 South China Sea, 3, 14, 20–21, 28, 43, 46, 92, 96, 121, 161, 175 Southeast Asia, 26, 53, 56, 69, 92, 94, 133, 158, 174 South Korea, 20, 35, 52, 87–88, 97, 133, 142–143, 165 South Korean Iron Silk Road, 42 Space Silk Road, 5, 52 Spain, 105–106 Sri Lanka, 47–48, 50, 54–55, 90, 93, 102, 146, 155, 173, 178 stacking, 141–142, 149 state capacity, 9, 84, 134, 144, 164 Strategic Economic Dialogue (then Strategic and Economic Dialogue), 19, 39 Strategic Trade Authority Tier 1, 37, 153 string of pearls hypothesis, 23, 48 Suga, Yoshihide, 100

185

Syriza (party), 107 Taiwan, 2, 14, 17, 29, 35, 37, 80, 148, 155, 166 Taiwan Assurance Act, 37 Tea Party movement, 84 Thailand, 98, 100, 133 Three Seas Initiative, 111 threshold effects, 29, 157 Thucydides Trap, 6 Tillerson, Rex, 31, 43, 143–144 Trade and Development Agency (TDA), 57, 99, 141, 144, 153 trade war, 34–35, 117, 156, 162, 168 Trans-Pacific Partnership (TPP), 21, 28, 38, 41, 80, 87-89, 125, 132, 142–143, 152–153, 162, 168, 170, 176, 178 Trieste, 107 Trilateral Infrastructure Working Group, 94 Trilateral Partnership for Infrastructure Investment in the Indo-Pacific, 97–98 Trump, Donald, 1–3, 6–7, 10–11, 13–15, 27, 30–39, 42–43, 45–46, 56–58, 61– 68, 71, 74–75, 77, 79–81, 87–91, 93, 99–104, 106, 109–112, 117–118, 122– 123, 125, 128–129, 132–133, 135, 138, 141–144, 148, 155–173, 175, 177–179 Truss, 121, 155 Turkey, 114, 119, 146 Twenty-first Century Maritime Silk Road, 11, 54 Ukraine, 7, 94, 117, 134, 145–147, 173 United Kingdom (UK), 68, 98, 103, 117– 125, 120–121, 124–125, 151, 155–156, 159, 161–162, 164–165, 171, 173–174, 176 UK-China Green Finance Taskforce, 120 United States-Mexico-Canada Agreement (USMCA), 123, 153 US Agency for International Development (USAID), 57, 67–68, 73, 75, 99, 102, 144, 177 US-ASEAN Connectivity Through Trade and Investment Initiative, 42 US Infrastructure Transaction and Assistance Network (ITAN), 96, 99– 100, 141–142, 152 US Innovation and Competition Act (USICA), 148, 153

186 Index US International Development Finance Corporation (DFC), 67–70, 72–73, 78, 144, 152, 176 US Overseas Private Investment Corporation (OPIC), 66–70, 97, 152, 161, 173 US-Taiwan Global Cooperation and Training Framework, 37 US Trade and Development Agency, 57, 99, 141 US-China Economic and Security Review Commission, 25–26, 176

war on terror, 14, 16, 32, 38, 62 Warren, Elizabeth, 13 Wells, Alice, 97 Widodo, Joko, 134, 178 World Bank, 15, 22, 49, 62, 134, 149 World Trade Organization (WTO), 1, 14, 17, 23–24, 27, 37, 112, 117, 153, 179

Vanuatu, 96 Vietnam, 43, 80, 98, 100, 133, 145, 172 Voice of America, 61, 164, 171–172

Zoellick, Robert, 15–16, 21, 49

Xi, Jinping (subsequently Xi), 3, 11, 13, 21–22, 30–31, 43, 46, 56, 67, 107, 118–119, 155–156, 160–161, 165– 167, 171–172, 175

About the Book

By March 2022, a remarkable 144 countries had signed onto the Belt and Road Initiative (BRI)—China’s massive investment and infrastructure development program—with significant implications for US foreign policy. Edward Ashbee explores how the United States has reacted to this global expansion of Chinese power, tracing the arc of policy responses to the BRI from its inception in 2013 through early 2022. Edward Ashbee is professor in the Department of International Economics,

Government, and Business at the Copenhagen Business School.

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