It’s a bad sign for the free world when a headline blares, “China is convinced that America is in decline.”
There are many reasons why China’s leadership could consider America to be a fading superpower, but certainly, one is its inconsistent and insufficient response to the Belt and Road Initiative (BRI) over the past eight years. This has spanned two administrations and both parties.
A new, detailed report from the Council on Foreign Relations (CRF) states that “[h]undreds of projects around the world now fall under the BRI umbrella” as it has expanded from a regional to a global initiative. And that “U.S. inaction as much as Chinese assertiveness is responsible for the economic and strategic predicament in which the United States finds itself.”
The CRF analysis recommends that the U.S. not “respond to BRI symmetrically, attempting to match China dollar for dollar or project for project.” Instead, it should be strategic in leveraging its core strengths and work with like-minded nations with a particular focus on technology development and governance strengthening.
The report makes myriad sensible recommendations. But a serious campaign to challenge the dominance of BRI needs a starting point. The energy area is one opportunity for the U.S. to begin to reverse the rout of BRI in the developing economy world.
Many of the BRI energy projects support nonrenewable power sources. Among the renewable energy projects hydropower dams predominate. The wind and solar projects are much smaller. So far there are no nuclear projects.
Large-scale nuclear power already provides 30% of the world’s low-carbon electricity and the technology will be necessary to achieve net-zero emissions by mid-century. But Russia now dominates that large reactor export market.
So, one opportunity is to leverage the U.S. lead in the development of smaller, next-generation nuclear energy. It is a gap in the BRI portfolio, a rare area of bipartisan political support, and an area where the U.S. needs to maintain a technological edge for national and global security purposes.
But the U.S. will have to change its business model if it wants to effectively compete for this next-gen market. According to the CFR report, the BRI countries value the “ease of dealing with a single group of builders, financiers, and government officials,” a package of partners the U.S. has not been very successful in assembling for nuclear power projects.
An interesting new article makes several important points that could help the Biden team mount a better BRI counter-offensive in the energy sector. It argues for a U.S. clean energy industrial policy that would support the domestic economic “Build Back Better” objectives of the administration as well as position the country as a clean energy technology exporter.
Industrial policy is not the pariah concept it once was now that the COVID pandemic has ravaged the American economy and highlighted the irresponsibility of overdependence on offshore supply chains. Even free market republicans have warmed to the idea as a means of more effectively competing with China.
To be successful, however, the process will require sustained government, private sector, and other stakeholder alacrity, cooperation, and investment. This will inevitably raise cries of favoritism for nuclear power. But, as the article’s author noted, “the energy sector has never been free of government intervention.”
Taking advantage of this opportunity also will require mounting a campaign to nail down the most likely next-gen nuclear markets, preparing those nations for the technology’s deployment, and assembling the range of policies and coalitions necessary to support this effort.
That kind of leadership needs to come from the top of the administration.
The Biden team is in the process of preparing more ambitious climate targets for an April summit and is assembling a reported $3 trillion infrastructure package that will offer massive clean energy technology expansion. These are opportunities to pull together the investment, policy development, market cultivation, and government-wide integration that are necessary for success of U.S. next-gen nuclear.
The alternative is China’s continued BRI coal plant exports that will lock “countries into decades of carbon intensive growth,” an outcome that is anathema to the administration’s zero-carbon objectives.
During the U.S.-China meeting this month, the communist party’s foreign policy chief declared that, “The United States does not have the qualification…to speak to China from a position of strength.” That is a stunningly slap in the face and a challenge to the globe’s leading democracy.
Coupling China’s assertiveness with perceptions of a fading superpower can be lethal to the global balance of power and the economic interests of America and its allies. This precarious position can be fleeting if the administration can construct an effective and strategic response to BRI beginning with clean energy. It won’t be easy, but it can build economic opportunity at home, strengthen the cohesion of a divided nation, and reposition the U.S. as a global technology and governance leader in the developing economy world.
Ken Luongo, President, Partnership for Global Security