The US aims to not only focus on bilateral relations during the G20 summit but also utilise the opportunity to persuade its allies and other developing nations in the region to consider it as a more favourable economic and security partner than China. US President Joe Biden aims to convince rapidly developing economies in Africa, Latin America, and Asia that there exists an alternative to China’s Belt and Road Initiative (BRI), which has provided substantial funding to developing nations but has often resulted in significant debt burdens.
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Biden has come prepared with financial support for the World Bank and commitments to ongoing US involvement. Even White House officials said Biden will use the G20 gathering as an opportunity for the US to highlight a proposition for developing middle-income countries that would increase the lending power of the World Bank and International Monetary Fund (IMF) by $200 billion.
Biden does not intend to meet Chinese Premier Li Qiang
Chinese President Xi Jinping’s absence is going to work in favour of the US as Biden does not intend to meet with Chinese Premier Li Qiang during the summit. The US has expressed concern over China’s recent actions, including reduced transparency with regard to fundamental economic data and its crackdown on companies within China that were previously responsible for providing such data. The US has also raised objections to China’s lending practices within the Belt and Road initiative, labelling them as ‘coercive’.
This refers to the $1 trillion infrastructure program that offers Chinese loans to economically challenged nations, often accompanied by conditions that limit the ability to renegotiate debt with other major creditor nations. China also typically maintains the right to demand repayment at its discretion, thereby granting Beijing significant influence over other countries.
Regions including the Middle East, Central Asia, developing parts of Asia, and subSaharan Africa are could experience GDP growth in the range of 3.2 per cent to 5.0 per cent in the coming year, according to IMF’s forecasts. This is higher than the relatively modest 1 per cent projected for the US and the global average of 3 per cent. However, these regions encounter substantial challenges in unlocking their growth potential, particularly as climate change puts pressure on outdated infrastructure, much of which traces its origins back to the colonial era.
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Biden’s proposal centres around reforming the World Bank
To counter Chinese hegemony and debt trap diplomacy, Biden’s proposal centres around reforming the World Bank and increasing funding for infrastructure and climate assistance in developing nations, to unlock hundreds of billions of additional dollars for grants and loans.
Furthermore, in addition to prior endeavours by the US and its allies to secure $600 billion in public and private funding by 2027 for the Partnership for Global Infrastructure and Investment, designed as an alternative to China’s BRI, the White House is seeking $3.3 billion from Congress to support this initiative. On the other hand, Xi is facing the complex task of steering China’s economy during one of its most tumultuous periods in many years.
China grappling with several issues
China is grappling with several issues, including a real estate market bubble, mounting local government debts, elevated levels of youth unemployment, and a challenge in bouncing back as anticipated from the effects of pandemic-related lock downs. Additionally, there is the longer-term concern of China’s population beginning to decline due to ageing demographics and decreased birth rates.
China’s declining influence and dictatorship approach will definitely give the US and India an edge to explore a new avenue to engage with other nations.China is a leading trading ally, investor, and increasingly, a vital lender, but India is not lacking much.
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US and India
The relationship between the US and India will hold immense significance in the upcoming years, as both countries aim to counter the rising influence of China in the region. Biden’s visit to Vietnam, post the G20 summit, is also being watched as a follow up step to send a strong message to China. Additionally, India has established itself as a friendly and ascending nation characterized by abundant opportunities and a spirit of openness. Numerous Middle Eastern and African nations perceive Bharat as actively pursuing shared prosperity through global economic growth, making it an ideal representative for the Global South.
