The Atlantic Council has released a new report on a key Chinese effort to develop infrastructure in Asia and beyond which deserves the attention of policymakers in Washington. Entitled "Silk Road 2.0: US Strategy toward China's Belt and Road Initiative," the Gal Luft-authored paper highlights some of the direct economic benefits U.S.-based businesses may realize through the China-led project:
The Trump administration is deeply committed to the development and upgrade of US domestic infrastructure, but little attention has been paid to the benefits for the US economy offered by infrastructure development abroad. Increased prosperity in the developing world will enable more consumers to demand American goods and services. US engineering, construction, and equipment-manufacturing companies like Bechtel, Caterpillar, John Deere, Honeywell, and General Electric could win lucrative contracts, and US defense and cybersecurity companies can help protect critical infrastructure worldwide.
With more energy terminals, pipelines, storage facilities, and free-trade zones constructed around the world, the US energy industry would enjoy more destinations for its oil, gas, and coal. And with 80 percent of the people in the developing world not connected to the Internet, American tech companies like Google, Amazon, and Facebook can win numerous new users, as more people become connected to the World Wide Web via energy and communication infrastructure. In seeking new growth engines and job-creation opportunities, Washington would be remiss to ignore the benefits to US businesses offered by the [Belt and Road Initiative].
Such analysis comports with some of my own thinking expressed in a paper published this week. As the section focused on China's infrastructure initiatives notes:
U.S. businesses, workers, and consumers, bearing no direct financial risk from [One Belt, One Road] or the [Asian Infrastructure Investment Bank], stand to benefit from those initiatives to the extent that they succeed in spurring more trade and greater prosperity in the region...policymakers should recognize that, although China may not be operating directly out of the preferred U.S. playbook, its efforts could serve to advance the broader U.S. objectives of peace and prosperity in Asia.
During the Obama administration, the U.S. evinced concern over China's effort to establish the Asian Infrastructure Investment Bank, which is a key element in the country's strategy to improve and expand the region's infrastructure. The administration's stance was viewed as a mistake by a variety of analysts, and President Obama later attempted to finesse the issue by claiming it was just a misunderstanding. President Trump, for all of his strident anti-China rhetoric on the campaign trail, dispatched a member of his National Security Council to attend China's first Belt and Road Forum last May, and is reported to have made comments favorable towards China's infrastructure push.
Such developments provide encouragement that the U.S. is trending away from its initial skepticism, if not hostility, towards China's infrastructure initiatives. If so, it is a welcome shift, and one that we should hope continues. These are yet early days, but China's leadership on this and other economic initiatives in the region could help to literally pave the way towards expanded trade and prosperity.