Spending trillions of dollars, Biden fights infrastructure with China

The $ 1,200 billion law passed, creating conditions for Biden to realize his ambition to change US infrastructure, increase competitiveness with China.

“China will take our lunch,” President Joe Biden told the US Senate in February, warning that the US was falling far behind China in infrastructure investment.

Fear of infrastructure lag before China was seen as the driving force behind Biden’s proposal of the Jobs and Infrastructure Investment bill, also known as the Bipartisan Infrastructure Agreement, with an initial budget of $2.3 trillion. After half a year of negotiations between bipartisan lawmakers, the budget package was nearly halved to $1.2 trillion and included annual federal investment in national infrastructure.

US President Joe Biden speaks about the infrastructure investment bill on November 6 at the White House.  Photo: AP.

US President Joe Biden speaks about the infrastructure investment bill on November 6 at the White House. Photo: AP.

However, another investment package being considered by the US Congress is the Build Back Better bill. If this bill is also passed, the US is expected to spend more than $ 3 trillion on infrastructure development, which is considered a necessary boost for Washington to catch up with Beijing in this key area.

China has maintained a hot growth momentum for many years by building infrastructure and developing real estate. In 2020 alone, China spent about $8 trillion on infrastructure investment, according to data from the National Bureau of Statistics. The US federal budget spent $146 billion on infrastructure projects during the same period.

In the three years 2011-2013, China used more cement than the US consumed in the entire 20th century. China’s infrastructure spending in 2018 accounted for 5.57% of GDP, ranking first in the ranking of 48 countries of the Organization for Economic Cooperation and Development (OECD). This rate for the US is 0.52%.

Between 2015 and 2020, China will expand 21% of the domestic railway network, bringing the total track length to more than 146,000 km. They plan to build nearly 50,000 km more railway before the end of 2035, with the ambition to overtake the US in terms of total length of rail network before the middle of the 21st century.

Beijing does not want to slow down. The 2021 central budget is expected to allocate about $94 billion for new projects, including “new infrastructure development”. The Chinese government in February announced its intention to build 162 more airports between now and 2035.

China’s unceasing progress in the infrastructure sector worries the US and is considered one of the important driving forces for the Democratic and Republican parties to overcome their deep divisions, agreeing to a strategic plan. President Biden’s ambitious infrastructure plan.

“The challenge from China is recognized by both parties and this is a welcome sign,” said Jonathan E. Hilman, senior fellow at the Center for Strategic and International Studies (CSIS).

When the $1.2 trillion bill is signed by Biden, the federal government will pour an additional $550 billion over five years into new investments, road and bridge upgrades, broadband internet, electric vehicle technology and a number of other areas. other areas across the country.

Biden also plans to pour $66 billion into the Amtrak national passenger rail system. In addition to the goal of renovating and modernizing the Northeast Corridor, the US will invest in building more long-distance transport routes, thereby expanding the railway network, which has a total length of nearly 260,000 km.

The Amtrak train leaves the station in Philadelphia, Pennsylvania in October. Photo: AP.

The Amtrak train leaves the station in Philadelphia, Pennsylvania in October. Photo: AP.

The White House confidently announced the budget package would bring “world-class rail service to areas beyond the Northeast and Mid-Atlantic states”.

Not only railways, China’s investment in roads and bridges is also blowing heat into the position of the US. They plan to increase the highway system by 47% by 2035, reaching a total length of nearly 200,000 km, surpassing the nearly 158,000 km mark of US highways. China is also far ahead of rivals in terms of electric vehicle infrastructure when it owns 1.68 million charging stations, while the US has 42,000 public charging stations.

President Biden is expected to spend $ 110 billion and $ 7.5 billion respectively to improve US infrastructure in the two areas above, to affirm the position of the US in this infrastructure battle.

In addition, about $65 billion is planned to develop high-speed broadband Internet nationwide, solving the situation where it is difficult for many rural areas to connect to high-speed Internet.

China also seems to feel the growing heat in the infrastructure race with the US after the $1.2 trillion bill was passed. Global Times, the newspaper of the People’s Daily, the mouthpiece of the Communist Party of China, published a commentary on November 7 saying that the US will never be able to build a dense rail network like China and the Their highways also lag behind China’s.

The Global Times described the above infrastructure law as a “hopeless attempt” by the US to “imperfectly imitate” China’s infrastructure achievements, even criticizing Washington for “getting lost in pride and arrogance”. his own conceit”.

However, according to Min Ye, an international relations expert at Boston University, the process of infrastructure development in China is not a rosy picture as the Chinese media promotes. “In terms of comprehensive infrastructure coverage, China is still behind the US, specifically the central and western regions of China,” she noted.

Some policy experts say the US needs this huge investment package not only to “combat China”, but also to maintain competitiveness with other major economies. The US government also needs to seize the rare opportunity when interest rates are unprecedentedly low to invest heavily in infrastructure.

“The Act is the right direction for America’s economic future in terms of responding to climate change and investing in future generations,” said Betsey Stevenson, University of Michigan economist and former member of the Advisory Council. Economic Advisor to the White House, note.

Trung Nhan (Follow Politico/Washington Post)

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