What US-led G20 deals mean for China

The U.S. is actively seeking to counter China’s international influence through the recent agreements made during the G20 summit in India. President Joe Biden committed $25 billion to reform the World Bank and International Monetary Fund, making them more flexible in lending to developing countries for renewable energy, climate mitigation, and critical infrastructure projects. Additionally, the U.S. and several other countries signed a deal to connect the Middle East, Europe, and Asia through rail and ports.

These initiatives are aimed at providing an alternative to China’s Belt and Road Initiative (BRI), which is China’s international infrastructure loan program. The BRI has led to significant debts for recipient countries, raising concerns about China’s “debt trap diplomacy.” As China’s domestic economy slows down, it may become more challenging for Chinese entities to continue funding overseas projects. The U.S.-led agreements from the G20 could fill the gap left by China.

These plans align with existing Western economic initiatives to compete with the BRI, including U.S. trade pacts for the Indo-Pacific region and the Americas, the EU’s Global Gateway, and the G7’s Partnership for Global Infrastructure and Investment.

What the US’s agreement with India means for China

During the G20 summit, President Biden and Indian Prime Minister Narendra Modi agreed to deepen collaboration on critical and emerging technologies such as quantum computing, space exploration, and telecommunications. This partnership aims to help India compete with China in the Indo-Pacific region.

The telecommunications aspect of their joint statement includes the U.S.’s Rip and Replace program, which aims to remove technology from Chinese companies like Huawei and ZTE and replace it with Western network equipment to protect user data. This move directly counters China’s telecommunication technology expansion.

What the US’s agreement with Vietnam means for China

President Biden elevated the bilateral relationship with Vietnam to a comprehensive strategic partnership during his visit. This expanded relationship encompasses various sectors, including economics, education, and technology. Vietnam, which has long relied on China as its top trading partner, will now receive $2 million from the U.S. to fund teaching labs and training courses for semiconductor assembly, testing, and packaging.

The U.S. and Western companies have already committed to setting up semiconductor factories and design centers in Vietnam, diversifying their supply chains away from China. This investment will make Vietnam an attractive destination for companies seeking alternatives to China as a sole source for their supply chain.

– “This fall, Congress will take its turn to re-engage China” – The Conversation
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