Boris Johnson gestures as he stands with Joe Biden during the G7 summit in Carbis Bay, Cornwall. AP
The Group of Seven richest democracies on Saturday sought to counter China’s growing influence by offering developing nations an infrastructure plan that would rival President Xi Jinping’s multi-trillion-dollar Belt and Road initiative.
The G7, whose leaders are meeting in southwestern England and who discussed strategic competition with Beijing, has been searching for a coherent response to the growing assertiveness of Xi after China’s surging economic and military rise over the past 40 years.
US President Joe Biden and other G7 leaders hope the plan, known as the Build Back Better World (B3W) initiative, will provide a transparent infrastructure partnership to help narrow the $40 trillion needed by developing nations by 2035, the White House said.
“This is not just about confronting or taking on China,” a senior official in Biden’s administration said. “But until now we haven’t offered a positive alternative that reflects our values, our standards and our way of doing business.” The G7 and its allies will use the initiative to mobilise private sector capital in areas such as climate, health and health security, digital technology, and gender equity and equality, the White House said.
It was not immediately clear how the plan would exactly work or how much capital it would ultimately allocate.
China’s Belt and Road Initiative (BRI) is a multi-trillion-dollar infrastructure scheme that Xi launched in 2013, involving development and investment initiatives that would stretch from Asia to Europe and beyond.
More than 100 countries have signed agreements with China to cooperate in BRI projects like railways, ports, highways and other infrastructure.
Critics say Xi’s plan to create a modern version of the ancient Silk Road trade route to link China with Asia, Europe and beyond is a vehicle for the expansion of Communist China. Beijing says such doubts betray the “imperial hangover” of many Western powers that humiliated China for centuries.
The re-emergence of China as a leading global power is considered to be one of the most significant geopolitical events of recent times, alongside the 1991 fall of the Soviet Union that ended the Cold War.
China in 1979 had an economy that was smaller than Italy’s, but after opening to foreign investment and introducing market reforms, it has become the world’s second-largest economy and is a global leader in a range of new technologies.
Leaders of the G7 — the United States, Canada, Britain, Germany, Italy, France and Japan — want to use their gathering in the seaside resort of Carbis Bay to show the world that the richest democracies can offer an alternative to China’s growing clout.
The US official said until now, the West had failed to offer a positive alternative to the “lack of transparency, poor environmental and labour standards, and coercive approach” of the Chinese government that had left many countries worse off.
According to a Refinitiv database, as of mid-last year, more than 2,600 projects at a cost of $3.7 trillion were linked to the Belt and Road Initiative, although the Chinese foreign ministry said last June that about 20% of projects had been seriously affected by the COVID-19 pandemic.
As part of the G7 plan, the United States will work with the US Congress to supplement existing development financing and to “collectively catalyze hundreds of billions of dollars of infrastructure investment,” the White House said.
G7 leaders meeting in Britain will endorse US President Joe Biden’s proposal for global minimum tax of at least 15% on corporations, White House national security adviser Jake Sullivan said on Twitter on Friday.
The US Treasury in May proposed a global minimum corporate tax of at least 15% to try to end a downward spiral of corporate tax rates.
“America is rallying the world to make big multinational corporations pay their fair share so we can invest in our middle class at home,” Sullivan tweeted.
By supporting the move, major economies are aiming to discourage multinationals from shifting profits - and tax revenues - to low-tax countries regardless of where their sales are made.
Current global tax rules date back to the 1920s and struggle with multinational tech giants that sell services remotely and attribute much of their profits to intellectual property held in low-tax jurisdictions.
US tech giants such as Facebook and Amazon could benefit from the agreement to create a global minimum 15% corporate tax rate if the final deal also scraps increasingly popular digital services taxes, according to industry lobbyists. The decision had been expected after G7 finance officials backed a tax rate of at least 15% during a meeting on June 5. The US Treasury has said the G7’s endorsement will provide momentum for advancing negotiations towards a broader G20 finance meeting in July in Italy.
Looking beyond the $1.9 trillion COVID relief bill, President Joe Biden and lawmakers are laying the groundwork for another top legislative priority - a long-sought boost to the nation’s roads,
On Feb. 15 the World Trade Organisation (WTO) elected Ngozi Okonjo-Iweala as the body’s seventh director general. She is the first woman and the first African to hold this post.
Some 130 countries have backed a global minimum tax as part of a worldwide effort to keep multinational firms from dodging taxes by shifting their profits to countries with low rates.
The Dubai property market is witnessing a remarkable recovery as an upward trend is noted in both the prices and demand for residential properties.
The last year was a very successful year for the Hamriyah Free Zone Authority (HFZA) in Sharjah, where it has continued to consolidate its position as a favored investment
Dubai’s business events sector and broader economy are poised to benefit from another year of successful bidding activity led by Dubai Business Events (DBE), the city’s official convention bureau.