As America faces supply chain shortages, decades-high inflation, and political division, China has been busy expanding its geopolitical influence. Last year, China invested $56.5 billion into its Belt and Road Initiative (BRI), a slight decrease from $60.5 billion the year before.
China’s BRI poses significant economic and environmental problems that the U.S. needs to address. By financing the infrastructure projects that nations sorely need, China is increasing its leverage in global markets for years to come while powering BRI projects with emissions-heavy coal.
Even as some positive steps have been taken, including the Uyghur Forced Labor Prevention Act, America’s response to China has largely been resolutions in Congress and a trade war that taxed American citizens more than it hurt Beijing.
Policymakers are right to be tough on China, but they have to be careful to not play into the CCP’s hands. To counter China, America should turn to economic freedom, not nationalism or isolationism.
A key tenet of economic freedom is free trade and open markets. By looking beyond its own borders and strengthening trade partnerships with South Korea and Taiwan, America can begin to counter China’s rising global influence.
The Belt and Road Initiative gives the CCP an opportunity to use its economic leverage abroad and become a loan shark for the developing world. Research from William & Mary University’s AidData has found that a majority of funding through the BRI is done through Chinese state banks. The loans usually have high interest rates that place most of the risk on poorer countries while favoring China. In Laos, the government had to sell off $600 million worth of their energy grid to pay back Chinese creditors for a rail system. This happened before the construction of the project even began.
This expansion could also hamstring America’s energy future. China was one of the first countries to recognize the Taliban’s legitimacy in Afghanistan, a country whose abundance of rare earth minerals, which are necessary to power clean-energy sources, totals anywhere from $1-$3 trillion. Unsurprisingly, Chinese BRI investment in the Middle East and North Africa increased by 360% in 2021.
China’s investments in emerging markets could also stifle meaningful progress to address global climate change. As CRES Forum states, “many [Belt and Road] projects are associated with high greenhouse gas emissions and will lock in emissions increases for decades.” This is especially important, since the largest share of future emissions will come from the developing world.
To combat this, the U.S. should seek to bolster trade beyond its own borders. Taiwan is already the United States’ ninth-largest trading partner, with trade between the two nations being valued at over $200 billion in 2020. With a key geographic location in the South China Sea and an emerging semiconductor market, America should actively pursue more ways to partner with Taiwan.
The trade relationship with South Korea is among America's strongest and has improved over the last decade. In 2021 Seoul-based SK Innovations announced that they would open a battery plant in Georgia, employing more than 1,000 workers.
Together with Taiwan and South Korea, the United States can cut into the CCP’s influence in the developing world. By increasing trade and offering financing options for key infrastructure projects that are more favorable to emerging economies, America and its allies can create new avenues for developing nations to more quickly climb the ladder of economic prosperity.
This multifaceted effort would provide a win for economic freedom and the environment worldwide. Rather than having the CCP serve as its loan shark, the developing world could see firsthand the benefits of American values such as democracy and free enterprise, creating allies and partners for years to come.
Jeff Luse is a Young Voices contributor and Policy Assistant at the Conservative Coalition for Climate Solutions (C3 Solutions). The views expressed are the author’s own.