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The United States reveals a $4 billion plan to counteract China’s sway

Strategic investments in Indo-Pacific to resist China’s efforts (Via Shana Keeney/Getty Images)

The Biden administration shared its budget plan for the 2025 fiscal year, stressing the importance of competing with China on different fronts. Deputy Secretary of State Rich Verma highlighted the need to use all available tools to outdo China, especially in fighting its influence through funding for infrastructure.

The budget includes $4 billion in mandatory funding over five years, with $2 billion set aside to create a new international infrastructure fund.

This fund aims to offer a reliable option to China’s financing of infrastructure, addressing worries about developing countries depending too much on Chinese investments.

Moreover, $2 billion will be used for “game-changing investments” to help Indo-Pacific countries resist harmful efforts. These investments will focus on improving governance, strengthening the rule of law, and supporting significant infrastructure projects.

The State Department also asked for $4 billion in discretionary funding for foreign aid and diplomatic efforts in the region.

This move is a response to China’s extensive Belt and Road Initiative, which has overshadowed U.S. efforts in funding infrastructure in developing countries.

The new fund to provide an alternative to China (Via Mitchelle Green/Shutterstock)

Chinese financial institutions have lent over $1.34 trillion to developing nations since 2000, challenging U.S. influence.

Verma stressed the need for strategic investment to effectively compete with China, both at home and abroad. The proposed infrastructure fund aims to back high-quality, sustainable projects that will boost economic development and stability in partner countries.

Furthermore, initiatives like the Partnership for Global Infrastructure and Investment aim to speed up investments in key infrastructure projects, working with similar-minded partners to counter China’s influence.

While China’s financing has received support in some areas, concerns about debt sustainability and dependency have worried recipient countries and Western nations.

The U.S. aims to offer an alternative that focuses on transparency, sustainability, and mutual benefit, countering China’s influence while promoting its own strategic interests.

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