The White House in recent days has touted a new selling point for the $1.2 trillion infrastructure bill — that it’s a powerful way to compete with China. But experts aren’t so sure.
President Joe Biden signed the bill into law in a ceremony on Monday as the White House continued to make the China competitiveness argument.
“This infrastructure bill is essential and important for many reasons,” White House press secretary Jen Psaki said during a Monday press briefing. “One of which is, for the first time in 20 years, we will be investing more in infrastructure than China.”
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Psaki apparently misspoke, with the official transcript crossing out “more” and replacing it with “faster.” Still, it’s difficult if not impossible to know if either statement is true, according to American Enterprise Institute senior fellow Zack Cooper.
“It’s an interesting claim, but I wouldn’t even know where to go to get reliable data on that since most Chinese data isn’t very reliable,” Cooper said. “And I haven’t seen a clear schedule for when the [American] money will be spent. It won’t all be spent next year.”
Further, Cooper argues it’s not particularly important which country spends more on roads, bridges, rail, or most forms of infrastructure. He sees the two countries as being in direct competition with some more technical infrastructure, such as building semiconductors, rather than in sheer spending. If the infrastructure bill is to be a success, he said, it will be because it focuses on what America does within its own borders rather than as a way to go toe to toe with another country.
Chinese economic data are famously unreliable, yet reports of the country’s infrastructure prowess abound. The country reportedly poured more cement from 2011 to 2013 than the United States did in the entire 20th century. In 2018, China spent 5.57% of its GDP on infrastructure compared to just 0.52% for the U.S.
Biden told a group of senators in February that if the U.S. doesn’t step up its infrastructure investment, China is “going to eat our lunch.” That same selling point is now being touted by the administration as it goes on tour to convince the American public of the bill’s significance.
That may be where the China competition narrative is most important — in helping sell the bill and especially in establishing bipartisan support. That the bill signing ceremony came on the same day as Biden’s virtual meeting with Chinese leader Xi Jinping also made the talking point timely.
Cooper sees China’s rise as an important reminder of the need for bipartisan cooperation, especially when it comes to foreign policy.
But doing so for domestic infrastructure may obscure the harder questions around costs, benefits, oversight, and accountability. The big picture, according to Boston University international relations professor Min Ye, is about more than seeing who can outspend the other.
“I feel like they are framing this as a U.S.-China competition. It’s like a magic bullet,” said Ye.
With the domestic legislation in place, the U.S. and other G-7 countries are now looking abroad at ways to facilitate foreign infrastructure investment, partially as a way to counteract China’s belt and road initiative.
“What a lot of foreign countries want more than anything in the security or tech area is economic assistance,” said Cooper. “If they feel like they’re getting that from China, they’ll be somewhat beholden to the Chinese Communist Party. It’ll be hard to push back on political issues if they’re depending on Chinese infrastructure.”
But details on the so-called Build Back Better World scheme aren’t expected to be released until early 2022.
The approach at home and abroad, Cooper said, should be to play to America’s strengths rather than trying to match whatever the Chinese are doing.
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Ye pointed out that China’s entire system of government and its economy are fundamentally different from America’s. All land in China is publicly owned, the banks are state-owned, and the government enjoys far more leeway to develop when and how it wants.
“If you frame it that the U.S. bill can help the domestic economy in the next three years, five years, 10 or 20 years, that in itself is justification enough,” said Ye. “The China question is less important than understanding how this money is going to be used.”
