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Eating our lunch: Biden points to China in development push

Eating our lunch: Biden points to China in development push

President Joe Biden talks with reporters on the Ellipse on the National Mall after spending the weekend at Camp David on Apr 5, 2021, in Washington. (Photo: AP/Evan Vucci)

WASHINGTON: Pushing for trillions of dollars in development spending, President Joe Biden and Democratic lawmakers are directing Americans’ eyes to the rear-view mirror, pointing to a booming, ambitious China they say is threatening to quickly overtake the United States in global clout and capacity.

It's a national security pitch for a domestic spending program: that the US$2 trillion proposal for investments in US transport and energy, manufacturing, internet and other sectors will make the United States more competitive in the face of Chinese President Xi Jinping’s massive infrastructure-building campaign.

The argument is that competition today with China is more about economic and technological gains than arms - and its outcome will impact the United States' financial growth and influence, its ability to defend US security alliances and interests abroad, and the daily lives of Americans.

China under Xi has "an overall goal to become the leading country in the world, the wealthiest country in the world, and the most powerful country in the world,” Biden said before launching his proposal last week. “That’s not going to happen on my watch because the United States are going to continue to grow and expand.”

That pitch hasn't won over Republicans. They say his proposal has been loaded down with unnecessary spending projects and that raising taxes will ultimately hurt the US economy.

Senate Republican leader Mitch McConnell said Republicans could support a “much more modest” approach, one that doesn’t rely on corporate tax hikes to pay for it. Biden’s plan is “something we’re not going to do,” McConnell said Monday.

READ: Biden says higher corporate taxes won't harm US economy

To varying degrees, addressing infrastructure has bipartisan support. Americans are experiencing outages, delays and irritations on transport and power systems designed in the 1960s and earlier. 

Meanwhile, China's latest five-year plan calls for hundreds more airports, coal-fired power plants and other standard infrastructure projects. Xi also is calling for his country’s focus on “new infrastructure,” including investment in 5G networks and other digital infrastructure.

“Time and momentum are on our side,” Xi told a meeting of the Communist Party last year.

China spends more on infrastructure projects in other countries than the United States spends at home, said Jonathan Hillman, a China expert at the Center for Strategic and International Studies. 

That and China's long-running economic boom, fuelled in part by its domestic infrastructure spending, are helping China become more influential internationally, and may give it more confidence as it makes claims over Taiwan and other contested territory or advances its interests, some argue.

Using urgent warnings of a rival’s advances to press for more infrastructure and research spending is a Cold War-tested technique. Past American presidents pointed to the Soviet Union while building up the US highway system, space program and arms stockpiles.

And in the case of infrastructure, Biden's repeated warnings that China and other countries are “eating our lunch” are borne out by many crucial metrics, and by the observations of almost anyone who's travelled abroad much.

“Almost every day” in the US, service providers somewhere announce “the power is out, the wi-fi is out,” said Min Ye, a researcher at Boston University whose work focuses on China and the intersection of economics and security.

Pointing to her two decades living in the Boston area, Ye says she has seen no really big upgrades to tired local road networks, no bus route upgrades that would help her get into the city more easily, no rail upkeep that would make a train trip to New York to see friends more enticing.

While Ye was glad to see Boston Logan International Airport launch projects to spiff up its interior and parking, it’s been more than a quarter-century since the United States last built a new major airport, in Denver. Academic studies and economists claim the lost hours of delays in the air and on roads and rails cost billions of dollars in lost productivity.

And the federal government estimates 18 million Americans lack internet. What internet there is is expensive, compared to that of other big economies. It all led to scenes of US workers and schoolchildren sitting in fast-food parking lots to do their work online this year as the pandemic shut down offices and schools.

Research done for the Group of 20 rich and developing nations estimates China’s infrastructure spending as a percentage of domestic production on track to be more than three times that of the United States.

READ: US pushing G20 for global minimum corporate tax: Yellen

In Congress, Senate Majority Leader Chuck Schumer is pushing legislation intended to pour technology research and development funding into the National Science Foundation and Commerce Department, to build US semiconductor production, and to strengthen domestic technology supply chains.

Schumer’s aim, he says: “Bolster American competitiveness and counter the growing economic threats we face across the globe, especially from the Chinese Communist Party.”

Ordinary Americans could start to feel the impact of China's investment in infrastructure and other support for the digital economy vs. the United States in ways big and small, said Hillman, the CSIS researcher.

There could be minor annoyances, like one day finding it tough to track down a USB cable with the right metal bit that fits their laptop, because design standards could start following those of China's booming market, not the United States', Hillman said.

But “ultimately it will result in fewer jobs” in the United States, Hillman said. “That’s the thing that is going to be most immediate in day to day life."

Ryan Hass, a former China director for the National Security Council in the Obama administration, cautions against overstating the threat that China’s rise poses to the United States. China is facing its own problems with debt, an ageing population, and slowing gains in worker productivity, Hass said.

“If the United States makes progress in fixing some of its own problems, including its infrastructure deficit, it will remain highly competitive with China,” Hass said.

Source: AP/ec


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