United States Unveils $60 Billion Agency to Counter China’s Global Influence

By Ian Palmer

Looking to balance against China’s growing economic influence in the world, President Donald Trump has embraced a massive foreign aid project to reassert American influence in developing countries. Just over a month ago, the Senate passed the Better Utilization of Investments Leading to Development (BUILD) Act, [1] which the President signed into law, despite promises of slashing foreign aid due to his America First doctrine. [2] Even with its implications, the bipartisan bill garnered very little media attention.  The BUILD Act establishes the United States International Development Finance Corporation and gives it the authority to provide “$60 billion in loans, loan guarantees, and insurance to companies” interested in business in developing nations. [3]  More subtly, this bill re-instills the role and importance of soft power in establishing strong relationships and checking America’s competitors.

While just two months ago President Trump threatened to roll back $3 billion in foreign aid,[4] the BUILD Act says less about a change of heart for international development and more about a desire for an exertion of power.  As China and the United States are engaged in a tumultuous trade war, and as the US has stumbled out of multinational negotiations such as the Trans-Pacific Partnership, Washington has left a feeble influence on the regions that China is developing such a firm grasp on.  Congress sought to rediscover the answer to American global primacy—the answer to its weaker global position—and it did so in this bill.  Creating an agency to bankroll foreign investments helps the US engage with developing countries and adds more competition to China’s focal point.  Beijing has done well to capitalize on its economic strengths and has realized that it need not compete with the United States in the traditional realm of military hard power.

The arena for global supremacy has shifted to the economy and the internet.  With “Made In China 2025”—Beijing’s plan to dominate the new technology market — China is expanding its influence via large-scale investments throughout Asia and Africa. [5] The vast majority of Asian countries, since 2011, have begun trading more with China than with the United States.[6] This has led to considerable implications for diplomacy and security in the South China Sea and the wider Asia-Pacific region.  In the contemporary world, economic might has surpassed military strength in the growing geopolitical rivalry between the two powers.  Soft power, then, becomes the standard by which to assert influence. Trump has endeavored with setting tariffs and dissuading foreign investments in US companies, but has largely avoided—and perhaps misunderstood—the capacity of soft power. 

The bipartisan origins of this bill have even more greatly underlined the necessity for soft power in maintaining America’s primacy.  Especially in a time when it seems so little legislation is bipartisan, the universalism of international relationship-building endures.  As China continues to expand its influence the Asia-Pacific region through investments and trade incentives, the United States should recognize that it must contend at every level of international relations.  With the International Development Finance Corporation’s goal of maximizing economic and political impact, Washington seems to be relearning that sole projections of military might may not enough to compete with its biggest competitor. 

Ian Palmer is a junior at Swarthmore College, where he is pursuing a double major in Political Science and Religion.

Works Cited

[1] Zengerle, Patricia. "Congress, Eying China, Votes to Overhaul Development Finance." Reuters. October 04, 2018. https://www.reuters.com/article/us-usa-congress-development/congress-eying-china-votes-to-overhaul-development-finance-idUSKCN1MD2HJ.

[2] "President Donald J. Trump Signs H.R. 302 into Law." The White House. October 5, 2018. https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-signs-h-r-302-law/.

[3] Thrush, Glenn. "Trump Embraces Foreign Aid to Counter China's Global Influence." The New York Times. October 14, 2018. https://www.nytimes.com/2018/10/14/world/asia/donald-trump-foreign-aid-bill.html.

[4] Morello, Carol, and Karoun Demirjian. "Trump Administration Is considering Pulling Back $3 Billion in Foreign Aid." The Washington Post. August 16, 2018. https://www.washingtonpost.com/world/national-security/trump-administration-is-considering-pulling-back-3-billion-in-foreign-aid/2018/08/16/05adc086-8e36-4265-b887-b481124a64b4_story.html?utm_term=.b58cf8f99b42.

[5] Perlez, Jane, Paul Mozur, and Jonathan Ansfield. "China's Technology Ambitions Could Upset the Global Trade Order." The New York Times. November 07, 2017. https://www.nytimes.com/2017/11/07/business/made-in-china-technology-trade.html?module=inline.

[6] Fisher, Max, and Audrey Carlsen. "How China Is Challenging American Dominance in Asia." The New York Times. March 09, 2018. https://www.nytimes.com/interactive/2018/03/09/world/asia/china-us-asia-rivalry.html.

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