Daniel Bach
Appearances
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
I reached out to China's Ministry of Foreign Affairs and the U.S. State Department for comment, but they didn't respond. So while Washington has signaled a transactional approach to foreign policy and given few specifics about how it plans to counter China's global infrastructure campaign, Beijing's ambitions remain laser-focused.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
In 12 years, China has planted its flag in more than 150 countries, financing and building everything from roads, megaports and mines to green energy and digital infrastructure. It's weathered an economic downturn at home and a pile of loans turning sour, adapting its program so it can continue to lend to developing nations.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
And what China has bought and paid for is influence, which will remain key to advancing Xi Jinping's strategic goals for years to come. And while the U.S. has warned of the dangers, if the aim is to push back, so far, it hasn't put forward a comprehensive plan.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
4% of global trade is ferried along Panama's 50-mile canal between the Pacific and Atlantic Oceans, and Trump was threatening to take control of it. The significance of the decision was clear. Panama was the first Latin American nation to officially join Beijing's Belt and Road Initiative back in 2017.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
That same year, it dropped its diplomatic recognition of Taiwan in favor of establishing ties with China. Since then, China's built or financed a canal bridge, a new subway line, a cruise ship terminal, a convention center, and a wind energy farm there.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
It's those projects, along with port infrastructure, that a Hong Kong-based company has operated on either side of the canal that Trump says violate U.S.-Panama treaties, treaties that required the canal to remain neutral after it was turned over by the U.S. a quarter century ago.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
Just this past week, word came that a group of investors led by BlackRock had agreed to buy majority stakes in the ports for about $23 billion. A change in ownership could go a long way toward addressing the administration's concerns, though an executive from the port's Hong Kong owner said the deal was purely commercial. As for those U.S.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
concerns, in an interview with Fox News, Rubio said that Chinese-owned infrastructure gives Beijing leverage over the waterway.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
Before he left for a five-country tour through Central America, Rubio wrote in a Wall Street Journal op-ed that the Chinese Communist Party uses economic and diplomatic pressure, including at the canal, to, quote, turn sovereign nations into vassal states.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
China's foreign ministry says Beijing respects Panama's sovereignty over the canal and that China has never participated in managing and operating it. But Trump ratcheted up the rhetoric, saying if Panama doesn't limit China's influence... We're going to take it back or something very powerful is going to happen. Trump got a lot of pushback. Panamanian officials and several former U.S.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
military officials, including a former NATO commander, say Chinese-built infrastructure there doesn't breach the canal's neutrality, let alone show that Panama's come under the influence of Beijing. But journal reporter Vera Bergen-Gruen was on the Latin America trip with Rubio, and she says the administration's threats were heard loud and clear.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
The biggest outcome of all of this? Molino announced that Panama will leave the Belt and Road program when its funding agreement with China expires and will also seek to end the deal sooner.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
I reached out to the State Department, and a spokesperson told me Panama's exit from Belt and Road proves the Trump administration's approach to diplomacy works. It's too soon to say what Panama leaving the program will mean in practice. It's hard to imagine any small nation completely turning its back on the world's second biggest economy.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
As for whether Washington would pressure other countries to cut ties with Beijing or its investments as a condition of working more closely with the U.S., the State Department declined to comment. After the break, we'll hear why past efforts by the West to counter Belton Road have been slow to get off the ground.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
As China has backed more and more projects in the developing countries across Africa, Asia, and Latin America, often referred to as the Global South, the U.S. has struggled to respond. Rana Mitter teaches U.S.-Asia relations at the Harvard Kennedy School in Massachusetts.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
So what do those answers look like? In 2019, under President Trump's first term, the U.S. set up the International Development Finance Corporation, known as the DFC, to help finance projects, including infrastructure, in developing nations. As of December, it had invested nearly $50 billion across 114 countries. That same year, Trump reauthorized the Export-Import Bank of the United States.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
It's the American equivalent to China's policy banks that, as you'll remember from episode one of this series, paved the way for Beijing's overseas lending push. And Washington also successfully pressured its European allies to cut out Huawei, arguing that allowing the Chinese company to build 5G networks posed an espionage threat. During the Biden years, the U.S.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
and Western partners continued to look for ways to bring together public and private financing to offer an alternative to Chinese lending. But overall, the U.S. approach has struggled to compete with China's direct full-core press.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
A few years ago, David Sachs, a fellow for Asia Studies at the Council on Foreign Relations, co-directed an independent task force on Belt and Road involving private sector experts and former government officials. And they concluded that it presented significant risks for American economic, political, security, climate, and health interests globally, and that the U.S.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
response had been insufficient. Sachs still thinks so.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
That raises the question of what a robust response from the West to China's expansion across continents through building and lending actually looks like. Sachs said the best way to counter the influence China has built is not by trying to outspend them.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
The 800-mile Libido Corridor Railway runs through Angola, and a plan to upgrade and extend it backed by the U.S. and Europe has been hailed by U.S. officials as a blueprint for how Washington can counter China's infrastructure push in Africa. Angola's received more infrastructure loans from China than any other country in Africa, over $45 billion in total, including for constructing railways.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
But years of neglect left the Lobito Railway with rundown stations, equipment that local operators didn't know how to use or fix, and parts of the tracks disappearing into long grass. That opened the door for Washington to gain a bigger foothold in 2022, when Angola rejected a Chinese bid to refurbish the railway in favor of a plan from a European consortium backed by the U.S.,
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
During his presidency, Joe Biden made shoring up commercial ties with Africa a policy priority.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
That was Biden last December, when he traveled to Angola on his last foreign trip as president. On that trip, he announced more than $560 million in new funding for the Lobito Corridor, bringing total U.S. investment in it to over $4 billion. So what's the upshot for the West? The U.S.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
and European investment will help connect a copper-rich region of Zambia and the copper, lithium, and cobalt mines of the Democratic Republic of Congo with the port city of Libido on Angola's Atlantic coast. That'll allow the U.S. to access the critical minerals trade in the region, something China has dominated, and speed up the transport of those green energy minerals from the source.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
Journal reporter Vera Bergen-Gruen traveled with then-President Biden to Angola.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
So could this blueprint get picked up by the Trump administration? The America First, Make America Great Again agenda cannot
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
That's Peter Fahm. He was Trump's special envoy for the Sahel and Great Lakes regions of Africa during the president's first term. Fahm says focusing on projects that have a strong business case for securing critical minerals, like those in Angola, would align with Trump's aim of rebuilding America's industrial base. I think critical to U.S.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
Coming up, a look at what Trump's first weeks back in office can tell us about how he might counter Belt and Road. Thank you for watching.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
The $40 billion agency helps some 130 countries fight famines, diseases, and human trafficking. Many lawmakers, including Republicans, say it's a crucial soft power tool in combating Beijing. As we heard in episode one of this series, Marco Rubio has long warned of dangers posed by China's Belt and Road program. And as a U.S. senator, he spent years praising U.S. aid as a way of countering China.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
Here he was speaking at an event hosted by the Washington Institute for Near East Policy in 2013.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
But almost overnight, President Trump gutted U.S. aid, saying its work doesn't align with American interests and leaving Rubio to preside over a vastly reduced assistance program. Foreign aid workers and some Democrats say they worry that the void left by U.S. aid cuts will push countries into China's arms. The State Department declined to comment.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
In its annual report ahead of November's election, a commission of security and economic experts convened by Congress said that to counter China's ambitions, there was a need for a, quote, "...clearly coordinated U.S.-led effort to build a coalition of like-minded countries."
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
So far, Trump seems to be going down a different path, primarily focusing on extracting from other countries concessions that serve American interests, like agreements with Colombia and Venezuela to take in deportees or pushing for a mineral rights deal with Ukraine. David Malpass, a former World Bank president and U.S.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
Treasury official in Trump's first administration, says the president's approach, which emphasizes negotiating, could help put China on the back foot.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
In the early days of Donald Trump's second term, he dispatched America's top diplomat, Secretary of State Marco Rubio, to a surprising place for a first trip abroad. Panama in Central America became ground zero for Trump's plan to hit back at China's growing influence in America's backyard.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
Rana Mitter from the Harvard Kennedy School, on the other hand, thinks Trump's tactics risk backfiring. He says that if the president makes good on his threat to impose tariffs on swaths of countries, and at the same time demands that they draw down links to Beijing, he could end up making other countries more reliant on China.
WSJ What’s News
China Has Been Building Influence for Years. How Will Trump Respond?
Mitter says it remains unclear what the U.S. is pitching to countries it wants to bring on side, while China is telling a compelling story about what's on the table when it invests in a country, making Belt and Road an ongoing risk to U.S. economic and security interests. David Sachs from CFR agrees that this threat won't be easy to displace.