STEVE INSKEEP, HOST:
How much progress has the United States made in its global competition with China? President Biden, like his predecessor, has taken a more confrontational approach to China than past administrations. This weekend is a moment to check Biden's progress because Biden wants to work with U.S. allies in facing China, and this weekend, many of them hold a summit - the G-7, the Group of Seven industrialized democracies. At last year's G-7 summit, Biden offered an approach to China. NPR White House correspondent Tamara Keith was listening then, and she has been asking how it worked out. Tam, good morning.
TAMARA KEITH, BYLINE: Good morning.
INSKEEP: What did Biden promise one year ago?
KEITH: So it's good to remember that this was Biden's first foreign trip a year ago, his first trip as president. And he was triumphant. He was declaring that America was back and reengaged in the world, and what he announced was part of this. He successfully got the G-7 leaders to put their weight behind something meant to be an alternative to China's Belt and Road Initiative.
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PRESIDENT JOE BIDEN: I put forward an idea that we named the Build Back Better World partnership.
KEITH: China has, for about a decade, been building roads and bridges and other big projects in Asia and Latin America and Africa, gaining a foothold in countries desperate for financing, extracting economic and political concessions along the way. So the pitch for Build Back Better World was to offer a more appealing alternative.
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BIDEN: It's a values-driven, high-standard, transparent financing mechanism we're going to provide and support projects in four key areas - climate, health, digital technology and gender equity.
KEITH: Think clean energy projects, 5G networks or something like rare minerals mining. But the initiative ran into a more challenging environment than just about anyone imagined at the time it was announced. Zack Cooper specializes in U.S.-Asia strategy at the American Enterprise Institute.
ZACK COOPER: There was a feeling that they'd be, you know, coming out of COVID globally in a really strong position to have a couple of years of very positive growth and building back, right?
KEITH: Instead, COVID has remained a challenge. Russia invaded Ukraine, setting off energy and food crises. Inflation became a serious problem globally.
COOPER: And now people are talking about heading back into a recession. I just think that's a very different environment to have this conversation.
KEITH: Without much fanfare, Biden administration officials have been working to make the project they announced a reality. This weekend, Biden and G-7 leaders will formally launch the program, announcing the first projects to be funded. But the initiative will have a new name. The Build Back Better branding, now associated with the president's stalled domestic economic agenda, is gone. But there's a lot of skepticism. Michael Shifter is a former president of the Inter-American Dialogue and is in regular touch with leaders in Latin America. He says it's a good idea, but...
MICHAEL SHIFTER: The expectations have really declined, and I'm not sure anybody's really expecting very much at this point, unfortunately.
KEITH: And he says in Latin America, working with China has filled a need.
SHIFTER: Countries are in dire straits. They need resources. There are opportunities the Chinese are offering, and the U.S. can't match those.
KEITH: The intentions are good, says Ian Bremmer at Eurasia Group, an international consulting firm, but there are a lot of questions about whether there's real money behind it.
IAN BREMMER: Whenever they talk to American officials, they say, well, if you don't want us investing in China, give us an alternative, right? If you don't want us tying up with Beijing and all this money they're offering, well, where else are we supposed to go? You don't have anything else. So this is meant to be that. And there's only one problem (laughter), which is that we don't actually have the money to fund it.
KEITH: The White House has heard the doubters. National Security Adviser Jake Sullivan, speaking in Washington last week, insisted it won't take as much U.S. government money as you might think.
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JAKE SULLIVAN: What we're really trying to stimulate is a long-term economic relationship rooted in private sector investment, not in massive cash transfers from the American Treasury to these countries. And that means taking relatively smaller amounts of money and leveraging significant private sector investment to add up to billions and, ultimately, tens of billions of dollars.
KEITH: In theory, this could work, says Matthew Goodman at the Center for Strategic and International Studies, a think tank. With a U.S. government seal of approval, the idea is private sector money would flow in from pension funds, hedge funds, private equity and insurance funds.
MATTHEW GOODMAN: We've got, like, $100 trillion plus, hundred trillion, far out-dwarfing what China may have to offer through Belt and Road.
KEITH: But these funds have to be convinced they can make a return on their investment, and there is risk in investing in projects in countries where markets can be opaque and the rule of law is unsteady by Western standards, says Goodman.
GOODMAN: You know, the question is, is this really going to tip the balance and incentivize these massive funds in the U.S. to go into these investments? And I think that's an open question still.
INSKEEP: That's one of the experts who spoke with NPR's Tamara Keith. And, Tam, first, thanks very much. I appreciate that. It was a really clear explanation of the difference between the U.S. strategy and the Chinese strategy. But there is that skepticism that you find. How does the administration answer the skepticism?
KEITH: Well, Biden administration officials are really bullish about this project, and we will get a better sense of why they are, in theory, when they announce the details of the first projects. Those details are being held tightly right now because this big meeting hasn't happened yet, and they want to be able to announce it there. But, you know, for all of their enthusiasm, there is a lot at this meeting that could overshadow any splashy announcement. You know, everyone here in the U.S. is waiting for the Supreme Court to hand down its decision in a case that could overturn Roe v. Wade, and if that happens while the president is overseas, that's all anyone will be talking about. And he, of course, will have to respond, and he'll want to.
INSKEEP: And even if that didn't happen, there are more urgent issues to discuss even at the G-7 summit itself.
KEITH: That's right. There are a lot of problems for these leaders to deal with. Russia's war in Ukraine is causing food and fuel shortages. Energy prices are high. That's hurting the economies of all of these countries. There's inflation. And so one thing that we do know is President Zelenskyy of Ukraine is expected to give virtual remarks both at the G-7 and then later at the NATO summit in Madrid.
INSKEEP: Tamara, thanks for your reporting.
KEITH: You're welcome.
INSKEEP: That's NPR's Tamara Keith.
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