By FP Staff
From the article:
With the United States and China locked in a trade war, US president Donald Trump is attempting to counter China's influence and its use of financing to advance its interests by signing a bill which created a new foreign aid agency.
The Better Utilisation of Investments Leading to Development (BUILD) Act was passed as part of a bill to reauthorise the Federal Aviation Administration. The measure creates a new agency, the US International Development Finance Cooperation, that consolidates the Overseas Private Investment Corp (OPIC) and other government development organisations.
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China has been promoting an ambitious Belt and Road initiative since 2013, as President Xi Jinping expands trade corridors along a modern-day Silk Road linking Asia, Europe and Africa, pumping credit into building roads, railways and ports in a trillion-dollar infrastructure initiative.
The Centre for Global Development has estimated that of the 68 countries currently hosting BRI-funded projects, 23 countries are at risk of debt distress, and in eight of those countries, future BRI-related financing raises serious concerns about sovereign debt sustainability.
Scott Morris, a senior fellow at the Center for Global Development, told Foreign Policy that rather than just criticising China's use of development finance, the Trump administration decided to support the legislation that gives countries an alternative to seeking funding from China.
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