US State Department requests $4 billion to outcompete China
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[March 12, 2024]
By Simon Lewis and Humeyra Pamuk
WASHINGTON (Reuters) - The United States must employ "all the tools at
our disposal" to outcompete China, a top U.S. State Department official
said on Monday, as the Biden administration unveiled its budget request
for the 2025 fiscal year.
The request includes $4 billion over five years in mandatory funding for
this purpose, including $2 billion to create a new international
infrastructure fund to provide a credible, reliable alternative to
Chinese infrastructure funding, Deputy Secretary of State for Management
and Resources Rich Verma told a news briefing.
The other $2 billion was earmarked for "game-changing investments" to
help Indo-Pacific countries push back against "predatory efforts," he
said, adding that those would include efforts to improve governance and
the rule of law.
The State Department requested a separate $4 billion in discretionary
funding to cover foreign assistance and diplomatic engagement in the
region.
U.S. efforts to fund infrastructure in developing countries have long
been dwarfed by China's massive Belt and Road Initiative, a 10-year-old
project to build infrastructure and energy networks connecting Asia with
Africa and Europe through overland and maritime routes.
According to a report by U.S. researchers last November, Chinese
financial institutions lent $1.34 trillion to developing countries from
2000 to 2021.
"We must employ all the tools at our disposal to outcompete China,
wherever possible," Verma said, also referring to China by the initials
of its official name, the People's Republic of China (PRC).
He said the request for fiscal 2025 would allow the U.S. "to continue to
invest in the foundations of our strength at home, align with
like-minded partners to strengthen our shared interests and address the
challenges posed by the PRC, and harness those assets to compete with
the PRC and defend our interests."
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U.S. and Chinese flags are seen in this illustration taken, January
30, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
Verma said the infrastructure fund would support "transformative,
quality and sustainable hard infrastructure projects."
At the 2023 G20 Summit in India, U.S. officials said President Joe
Biden and Indian Prime Minister Narendra Modi co-hosted a group of
G20 leaders to accelerate investments in high-quality infrastructure
projects and development of economic corridors through a Partnership
for Global Infrastructure and Investment (PGI).
This came after the Group of Seven rich Western countries leaders
pledged in 2022 to raise $600 billion in private and public funds
over five years to finance needed infrastructure in developing
countries and counter the Belt and Road project.
Overseas finance has won Beijing friends across the developing
world, while drawing criticism from the West and in some recipient
countries, including Sri Lanka and Zambia, that infrastructure
projects it funded saddled them with debt they were unable to repay.
(Reporting by Humeyra Pamuk, Simon Lewis and David Brunnstrom;
Editing by Chris Reese, Don Durfee and Jonathan Oatis)
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