TRANS-PACIFIC VIEW | DIPLOMACY | SOUTHEAS

B3W Might Not Be

Able to Compete
With BRI in
Southeast Asia,
But That’s Okay
Rather than competing in a
sector where China is
strong – infrastructure –
B3W should focus on U.S.
strength areas.

By Maria Adele Carrai and William Yuen Yee

February 10, 2022
 Credit: Depositphotos

The opening of a $5.9 billion high-speed railway

that links Laos to China has reignited questions
about the ability of the nascent U.S.-led Build
Back Better World initiative (B3W) to compete
with China’s Belt and Road Initiative (BRI) in
Southeast Asia. Instead, the Biden
administration should focus on the United
States’ other competitive advantages over China
– technology, healthcare, and education – to
effectively counter Beijing’s rising influence in
the region.
The Biden administration has embraced
Southeast Asia as a cornerstone of its policy in
the Indo-Pacific. U.S. President Joe Biden himself
attended the virtual East Asia Summit in
October 2021, an annual gathering that his
predecessor repeatedly snubbed. In his
December 2021 visit to the region, Secretary of
State Antony Blinken proclaimed that “much of
the planet’s future will be written in the Indo-
Pacific.”
Blinken spent much of his visit promoting B3W,
with its emphasis on “freedom” and “openness,”
as an alternative to China’s BRI. However, such
comments misunderstand the challenge posed
by China’s BRI and the interests of Southeast
Asian nations. China’s primary advantage in
infrastructure diplomacy lies in its one-stop-
shop package of project finance, insurance, and
construction for developing nations.
Furthermore, recent polls indicate that many
ASEAN residents support China’s activities, a
sign that they might be less enticed by
aspirational soliloquies about democracy and
more concerned with building usable roads,
bridges, and airports.
By comparison, the B3W is less attractive. Many
low- and middle-income countries prefer
Beijing’s state-backed loans over higher-cost and
shorter-term private funding from Western
financiers. The U.S. and other G-7 countries
often impose what feels like onerous conditions
that delay project implementation and increase
costs. On top of that, B3W relies on unreliable
private funding. It is difficult to convince
private firms in developed G-7 countries to
invest in the developing world, which they view
as high risk and low reward.
Since the 1990s, the United States – like many
other Western economies – has drastically
reduced its infrastructure investment in
developing nations. And despite efforts under
the Trump administration to reinvigorate such
financing, the numbers still pale in comparison
to investments from China. In 2019, the U.S.
International Development Finance Corporation
capped its spending at $60 billion. China has
already spent an estimated $200 billion on the
BRI, and some project its overall investments
will reach $1.3 trillion by 2027.
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Moreover, unlike China, the United States does
not boast much infrastructure experience at
home. Since the 1950s, the U.S. has spent less
than 1 percent of GDP on its own domestic
infrastructure development. The BRI-backed
railway in Laos highlights this disparity. As
former Singaporean diplomat Kishore
Mahbubani said, Laos – one of Southeast Asia’s
poorest countries – “now has a faster train than
anything the United States has.”
When it comes to infrastructure, then, the U.S.
significantly trails China in funding,
institutional mechanisms, and experience.
While the Biden administration can and should
continue to push B3W, especially given the high
standards that it promotes, it is also time to
grapple with a hard truth: Build Back Better
World might not be able to effectively compete
with the Belt and Road Initiative in Southeast
Asia.
Instead, the Biden administration should turn to
other areas of economic and diplomatic
engagement. A U.S.-ASEAN digital trade
agreement to set regional rules on cross-border
data flows, privacy protection, and artificial
intelligence is a start. In 2020, China’s trade with
Southeast Asia totaled $685 billion, nearly
double that of the United States. Such an
agreement will be critical given the United
States’ continued absence from Asia’s two
biggest trade pacts: the Regional Comprehensive
Economic Partnership and the Comprehensive
and Progressive Agreement for Trans-Pacific
Partnership. China is a member of the former
and recently applied to join the latter.
The United States could also leverage its
comparative advantages in healthcare and
education to strengthen ties with Southeast
Asia. While China enthusiastically provided its
domestically produced COVID-19 vaccines to
ASEAN countries, leading officials across the
region raised concerns about the efficacy of
such shots, with many ultimately embracing
Western-made boosters. The Biden
administration should continue to send vaccines
to the ASEAN nations that need it: Countries like
Thailand, Laos, and Vietnam have vaccinated
less than 25 percent of their citizens. The U.S.
should also increase collaboration with local
governments to combat diseases like HIV and
malaria. The Biden administration took a step in
the right direction by allocating $40 million to
such efforts last October. Finally, to strengthen
cultural ties, the United States should offer more
scholarships to Southeast Asian students, a
strategy successfully used by the Japanese
government. 80,000 students from ASEAN
countries study in China, while 60,000 study in
the United States.
To compete with China in Southeast Asia, the
Biden administration should substantiate B3W’s
democratic aspirations. Increasing economic
engagement, health cooperation, and student
exchanges with ASEAN countries is a good start.
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AUTHORS

GUEST AUTHOR

Maria Adele Carrai

Maria Adele Carrai is an assistant professor of
Global China Studies at New York University
Shanghai and an associate at the Harvard
University Asia Center. Her research explores the
history of international law in East Asia and
investigates how China’s rise as a global power is
shaping norms and redefining the international
distribution of power.

GUEST AUTHOR

William Yuen Yee

William Yuen Yee is a research assistant for
Professor Thomas Christensen at the Columbia-
Harvard China and the World Program. He has
previously written about China's foreign relations
and international trade for the Center for
Strategic and International Studies and the
Jamestown Foundation.

TAGS

Trans-Pacific View Diplomacy Southeast Asia China

United States B3W Belt and Road in Southeast Asia

Build Back a Better World Chinese infrastructure in ASEAN

Chinese infrastructure investment