G7 launches $600B global infrastructure project to counter China

US President Joe Biden

The plan, formally announced by US President Biden at the G7 summit, will target countries desperately needing everything from roads to harbours - and until now often relying on the Chinese.

US President Joe Biden has announced a G7 project to rival China's formidable Belt and Road Initiative by raising some $600 billion for global infrastructure programmes in poor countries.

"Together with G7 partners, we aim to mobilise $600 billion by 2027 in global infrastructure investments," the White House said shortly ahead of a speech by Biden unveiling the proposal.

The plan, which relaunches a first attempt unveiled during last year's G7, will target countries desperately needing everything from roads to harbours - and until now often relying on the Chinese.

The gargantuan BRI project has successfully used Chinese infrastructure know-how to spread Beijing's economic and diplomatic tentacles into strategic points around world, leaving Western governments flat-footed.

Unlike the Chinese version, reliant on state-controlled funds and companies, Biden said the US and other G7 governments will only provide limited amounts of money, while incentivising massive private sector investments.

Between now and 2027, the US government will shoot for the $600-billion figure "through grants, federal financing, and leveraging private sector investments," the White House said.

"This will only be the beginning: the United States and its G7 partners will also seek to mobilise hundreds of billions in additional capital from other like-minded partners, multilateral development banks, development finance institutions, sovereign wealth funds, and more."

'Not too late'

The investment target is clearly only aspirational. And a senior US official acknowledged that the West is currently in second place when it comes to the global infrastructure game.

Yet he denied that China has a real advantage.

"There's no doubt that the Belt and Road Initiative has been around for several years and it's made a lot of cash disbursements and investments - and that we're coming to this after years of their investments," the official said.

"But I would argue that it is definitely not too late. And I'm not even sure that it is late."

While the obvious targets for the US-led initiative are in Africa, South America and much of Asia are also on the radar. 

Fallout from Russia's incursion into Ukraine means that "even places in eastern Europe" could be brought into the fold, the official said.