China Pakistan Economic Corridor (CPEC): Myths And Facts

[Riaz Haq]

Is China using China Pakistan Economic Corridor (CPEC) to colonize Pakistan just as the British East India company colonized India centuries earlier?

Will Pakistan be caught in a massive Chinese debt trap and eventually become China's colony? What are the terms of Chinese financing and investments in CPEC projects in Pakistan?

Are Pakistanis required to pay exorbitant interest rates on infrastructure loans and unreasonably high return on equity on power plant investments?

Is there an IBM-like organized campaign of fear, uncertainty and doubt (FUD) being waged by CPEC's detractors to convince Pakistanis that it's a zero sum game in which China's gain is Pakistan's loss?

Is there no possibility of win-win in CPEC for both China and Pakistan?

Viewpoint From Overseas host Faraz Darvesh discusses these questions with Misbah Azam and Riaz Haq (www.riazhaq.com)

https://youtu.be/NixuaR0_jws

Related Links:

Haq's Musings

Campaign of Fear, Uncertainty and Doubt Against CPEC

CPEC Financing: Is China Ripping Off Pakistan?

CPEC Transforming Least Developed Parts of Pakistan

Pakistan Rising or Falling? Reality vs Perception

Pakistan Generating Positive Vibes at Davos 2018

CPEC to Create Over 2 Million Jobs in Pakistan

Pakistan's $20 Billion Tourism Industry Boom

Home Appliance Ownership in Pakistani Households

Riaz Haq's YouTube Channel

PakAlumni Social Network

[Riaz Haq]

Who’s Afraid of China

http://newslinemagazine.com/magazine/whos-afraid-china/

Ishrat Husain is a former dean and director of IBA and a former governor of the State Bank of Pakistan.

The foremost singular contribution that has already made a significant and visible difference is the addition of 10,000MW to the generation capacity in Pakistan, in a span of four years. It has overcome chronic energy shortages, altered the fuel mix, and substituted plants with 61 per cent efficiency factor in place of those operating at 28 per cent, bringing down the cost to consumers. Electricity outages had cost the economy about 1.5 to 2 percentage points of the Gross Domestic Product (GDP). Export orders were cancelled and the buyers walked out of Pakistan as their traditional suppliers could not fulfil the orders on time, due to energy shortages. The value of exports took a dip, precipitating a balance of payments crisis. As new hydel, renewable, coal-based projects come on board, there will be a corresponding shrinking of imports of furnace oil and diesel.

The associated risk of an additional supply of power is that unless we restructure or privatise the distribution companies, or make the power distribution sector competitive, the circular debt would keep on rising. Distribution losses and non-recovery of dues have put enormous pressure on public finances, and the subsidies on this account may escalate if institutional reforms are not undertaken.

The second area that would benefit Pakistan is the construction of highways and the railway line linking Gwadar with Kashgar and the mass transit systems within big cities. The rehabilitation and upgrading of the main railway line with high speed trains, would relieve businesses of the high cost of domestic transportation of goods to and from Karachi (at present, the bulk of the freight is carried by a trucking fleet). The inner city mass transit systems in Lahore, Peshawar, Karachi and Quetta, would provide safe and affordable public transport to the citizens, who face inconvenience and spend a lot of time and money in commuting to work. The reduced travel time and saving in transportation expenses would increase their productivity and also augment the purchasing power of the lower income and the lower middle-income group.

The western route would open up backward districts in Balochistan and southern Khyber-Pakhtunkhwa (KP) and integrate them with the national markets. The communities living along the route would be able to produce and sell the output from their mining, livestock and poultry, horticulture and fisheries, to a much larger segment of consumers. Their transportation costs would become considerably lower, the proportion of perishables and waste would go down, cool chains and warehousing would become available and processing would become possible in the adjoining industrial zones. Access to a large trucking fleet and containers, with greater frequency and reduced turnaround, time may help in the scaling-up of operations. The fibre optic network would allow the citizens of these deprived districts access to the latest 3G and 4G broadband Internet connections.

[Riaz Haq]

Pakistan Scholar Program: 2014-2015 Information and Application

https://www.wilsoncenter.org/opportunity/pakistan-scholar-program-2...


Current Wilson Center Pakistan Scholar

Khurram Husain, 2013-14

Previous Wilson Center Pakistan Scholars

Simbal Khan, 2012-13
Zahid Husain, 2011-12
Huma Yusuf, 2010-11
Dr. Sabiha Mansoor, 2009-10
Amb. Riaz Mohammad Khan, 2008-09
Dr. Samia Altaf, 2007-08
Khaled Ahmed, 2006-07
Dr. Mushtaq Khan, 2005-06
Dr. Ayesha Siddiqa, 2004-05

The Wilson Center

The Woodrow Wilson International Center for Scholars is Washington's only independent, wide-ranging, non-partisan institute for advanced research where vital current issues and their historical and cultural background are explored through research and dialogue. Created by the Congress of the United States as the nation's official memorial to its twentieth-eighth president, the Center seeks to commemorate through its residential fellowship program both the scholarly depth and the public policy concerns of Woodrow Wilson.

Eligibility

This competition is open to men and women who are from, and based in, Pakistan. Applications will be accepted from individuals in academia, business, journalism, government, law, and related professions. Candidates must be currently pursuing research on key public policy issues facing Pakistan, research designed to bridge the gap between the academic and the policymaking worlds.

The Wilson Center customarily expects its visiting scholars to possess the terminal degree in their field. For academics, such as university professors, the terminal degree generally means a Ph.D. But other professions have different terminal degrees; for journalists or businesspeople, it could well be a B.A. In exceptional cases, the Wilson Center will waive the terminal degree requirement for highly qualified and unusually talented applicants. But under no circumstances will the Pakistan Scholar competition be open to anyone currently pursuing a graduate degree or working on a doctoral dissertation.

In addition, applicants must have at least eight years of professional or research experience. Preference will be given to applicants who have published scholarly books or substantial articles in academic or policy-related journals or newspapers.

Applicants must be completely fluent in both written and spoken English.

Length of Appointment and Responsibilities

Pakistan Scholars will be in residence at the Woodrow Wilson Center for the U.S. academic year, September 2014 - May 2015. While at the Wilson Center, Pakistan Scholars will be expected to carry out a full schedule of rigorous research and writing based on the topic outlined in the research proposal submitted at the time of application. They will also be expected to participate in workshops, seminars, and conferences organized by the Center's Asia Program, and in other ways to participate in the intellectual life of the Wilson Center and the larger community of South Asia observers in Washington.

Stipend

The stipend provided to Pakistan Scholars is $5,000 per month. In addition, the Wilson Center will also pay a portion of health insurance premiums for the scholar, and provide assistance for travel from Pakistan. The scholars will be provided with suitable work space, a Windows-based computer, and where feasible, a part-time research assistant.

[Riaz Haq]

BUSINESS DAY
Confessing to the Converted
By LANDON THOMAS JR.FEB. 19, 2006

https://www.nytimes.com/2006/02/19/business/yourmoney/confessing-to...

In an early scene that sets the tone for the book, he describes being seduced by a mysterious Catherine Zeta-Jones look-alike who called herself Claudine Martin and supposedly worked at Main. In an interview, he said she plied him with cocaine, red wine and ultimately herself. "We are a small exclusive club," she says in the book. "Your job is to encourage world leaders to become part of a vast network that promotes U.S. commercial interests. In the end, those leaders become ensnared in a web of debt that ensures their loyalty."

In the book, Mr. Perkins recounts the nine years in which he worked for Main in the 1970's. From Ecuador to Panama, Iran to Saudi Arabia, the mission was the same: working in league with government agencies, Mr. Perkins claimed that he inflated the economic growth forecasts of these countries and smoothed the way for the billions in loans that they took on. Ultimately, he said, the funds were recycled to the United States as these countries became clients of big American engineering, construction and manufacturing companies, including Bechtel, Halliburton, Boeing and others.

BUT in his telling, Mr. Perkins was constantly haunted by the feeling that he was in effect a hit man -- paid officially by his employer, Main Inc., but under the more oblique sway of the government and intelligence agencies. The son of a conservative New England family, he whips himself for having succumbed to pleasures of the flesh as well as the lure of money, influence and power.

In 1980, Mr. Perkins quit his job at Main. For much of the next two decades, he worked as a consultant, entrepreneur and specialist on the culture and practices of indigenous people of Latin America. After the terror attacks of Sept. 11, 2001, he said, he felt that it was time to tell his story. After being turned down by bigger publishers, Berrett-Koehler took a chance and published the book in 2004. A best seller in hardcover, despite few mainstream book reviews, the book has sold as many as 5,500 copies a week in paperback.

Mr. Perkins invests much of the story with earnest, pulpy touches. He writes of himself drinking beers and listening to Jimmy Buffett under magenta skies with beautiful women, meeting with disfigured dissidents in shantytowns outside of Tehran and absorbing the whispered warnings about the United States' imperial designs from Latin American leaders.

Michael M. Thomas, a former investment banker and novelist of Wall Street manners, says a book's success will often be determined more by its voice than its subject. And for now, Mr. Perkins's message of conspiracy carries the perfect pitch for many readers -- no matter how fantastic his conclusions may be.

"The odd side of our character is that we believe that dark powers are arranged against us -- call it the Da Vinci codes of finance," Mr. Thomas said. "But really, I never heard of anybody being assassinated for lack of taking a loan."

Indeed, for all the book's success, Mr. Perkins has faced numerous questions about the veracity of some of his dreamier contentions. Earlier this month, for example, the State Department released a brief report called "Confessions -- or Fantasies -- of an Economic Hit Man" that took issue with one of Mr. Perkins' primary assertions: that the National Security Agency, with a wink and a nod, was aware of and may even have approved Mr. Perkins's hiring at Main.

[Riaz Haq]

Investment project with 14% is impossible. Sinosure's rates are set at maximum 7% for the total period of 15-20 years of the project. However it is paid only once, therefore it is 0.3-0.5% every year. If you add LIBOR+4.5%, it is only about 6%, not 14%.

 

https://twitter.com/zlj517/status/1044321706033197058

 

At budget seminar today it was authoritatively disclosed that loans for CPEC projects are at LIBOR+ 4.5%+Insurance guarantee 7.5% ie nearly 14% interest. Can any economy borrow at this rate? Watch out! Absence of transparency undermining CPEC. Clarification needed.

 

https://twitter.com/FarhatullahB/status/1044256222852108288

 

http://web.isanet.org/Web/Conferences/HKU2017-s/Archive/a30ae7f2-83...

 

Research into the NEPRA archives has indicated that in July of 2015 [CPEC start, April 2015] there began a flood of petitions filed consecutively for inclusion of Sinosure fees into wind power project financing. For NEPRA, this amounts to an unmatched influx of pressure unseen anywhere else in their operating history, and presents compelling evidence both in frequency and qualitative content to move to withdraw support from the null hypothesis.

The NEPRA petition database shows a large uptick in requests that the Government of Pakistan capitulate to Chinese requirements to utilize insurance through Sinosure. For Chinese projects abroad, project insurance flows through one provider. This firm is the China Export and Credit Insurance Corporation/中国出口信用保险公司, or Sinosure. This State Owned Enterprise is China’s main insurer of export financing and provides protection for SOE’s and other large firms against political, commercial and/or credit risks operating or exporting abroad. 

Critically, Sinosure coverage is mandatory insurance for Chinese overseas bank loan and equity investment. In other words, it is required for anyone outside China who wants access to this type of capital from Chinese actors. 

In stark contrast to previous years of highly diverse NEPRA petition data, Sinosure related documents show a high degree of coordination. They are unwavering in noting that Chinese state-owned insurance for project funding is required for Chinese capital. Five separate petitions from firms note that “[…] Plea: Sinosure Insurance is a contingent requirement of Debt from China. It is approved by NEPRA for other Projects (Coal etc.). It is a mandatory cost for Chinese Debt and should be incorporated as a pass-through cost by NEPRA.”42 This exact language is found in each of the five petitions originating from distinct wind energy firms. Highly similar language to this is also found in a petition from the Government of Sindh, Directorate of Alternative Energy/Energy Department in Karachi, signifying coordinated inter-governmental and private sector pressure.43 Furthermore, Harbin Electric International, a Chinese State Owned Enterprise, filed its own petition to 

[Riaz Haq]

In late March, the government of Italy signed a memorandum of understanding to join China’s Belt and Road Initiative, Beijing’s $1 trillion plan to develop land and sea trade routes from Asia to Africa to Europe. Italy is the first large European economy to do this, agreeing in principle to deals with China worth about $2.8 billion in investment in a variety of sectors.

https://foreignpolicy.com/2019/04/01/italy-should-learn-a-thing-or-...


This set off alarm bells in the White House and groans in the European Union. While the Trump administration fretted about yet another Chinese attempt to expand its sphere of influence, the EU stressed that Italy was undermining Europe’s ability to engage with China as a single bloc.

Italy’s rationale for joining the Belt and Road Initiative is straightforward: An influx of Chinese investment could help push Italy out of its economic doldrums. Meanwhile, Italian exporters could gain access to China’s massive domestic market. That sounds attractive enough, but Italy would be wise to look to other countries that have signed up for the initiative and the challenges they’ve faced. Pakistan’s experience in particular is telling.

At first blush, the two countries seem wildly different. Italy is a member of the G-7 and the world’s eighth largest economy. Pakistan, despite having more than triple the population, barely cracks the top 40. It has also been bailed out by the IMF nearly 15 times.

On closer inspection, though, the two countries share important similarities.

Both Pakistan and Italy are heavily burdened with debt: As of 2018, Pakistan’s debt was 73 percent of GDP, and Italy’s was an eye-popping 132 percent.Both Pakistan and Italy are heavily burdened with debt: As of 2018, Pakistan’s debt was 73 percent of GDP, and Italy’s was an eye-popping 132 percent. Each is reliant on external help: Pakistan has required a combination of IMF loans and the support of the Gulf states and China to keep it in the black. Similarly, since the 2008 financial crisis, Italy has relied on bailouts from the European Central Bank. To compound matters, Italy’s growth rate has been near zero.
As a result, both states have been hungry for external capital, both are in search of new markets for their exports, and both need to claw their way out of debt. In Pakistan, former Prime Minister Nawaz Sharif decided that Belt and Road fit the bill, and he opened his country up to a wave of Chinese investments in 2015.

The results have been mixed. China has indeed poured money into Pakistan, but it’s been in the form of loans to Pakistan that it must then give to Chinese firms to set up shop there. Those firms have invested in equipment bought in China—not Pakistan. With little capital going into Pakistan, the country’s debt burden has only shot up. Pakistan is now negotiating with the IMF for a new bailout, but the IMF’s concern about the lack of transparency of Pakistan’s debts to China has complicated matters.

One can foresee similar tensions arising in Italy: a European Central Bank that is reluctant to come to the aid of an Italy that takes on greater debt in exchange for less transparency. The United States has advanced the argument that the IMF and its donor states shouldn’t subsidize Pakistan’s dealings with China. Italy could find itself in a similar position with the European Central Bank.

[Riaz Haq]

US: "No debt relief for #Africa". Africa’s current #debt load consists of commercial debt to western financial institutions or Eurobonds, which are more expensive to service than loans from #China which #UnitedStates accuses of "debt trap" #BRI #China https://reut.rs/2RtGM6a

PRETORIA (Reuters) - African countries running up debt they won’t be able to pay back, including to China, should not expect to be bailed out by western-sponsored debt relief, the United States’ top Africa diplomat warned.

The International Monetary Fund and World Bank began the Heavily Indebted Poor Countries (HIPC) Initiative in 1996 to help the world’s poorest countries clear billions of dollars worth of unsustainable debt.

But Africa is facing another potential debt crisis today, with around 40 percent of low-income countries in the region now in debt distress or at high risk of it, according to an IMF report released a year ago.

“We went through, just in the last 20 years, this big debt forgiveness for a lot of African countries,” said U.S. Assistant Secretary of State for Africa for African Affairs Tibor Nagy, referring to the HIPC program.

“Now all of a sudden are we going to go through another cycle of that? ... I certainly would not be sympathetic, and I don’t think my administration would be sympathetic to that kind of situation,” he told reporters in Pretoria, South Africa, late on Sunday.

Under Donald Trump’s administration, the United States has criticized China for pushing poor countries into debt, mainly through lending for large-scale infrastructure projects. It has warned those nations risk losing control of strategic assets if they can’t repay the Chinese loans.


Sri Lanka formally handed over commercial activities in its main southern port in the town of Hambantota to a Chinese company in 2017 as part of a plan to convert $6 billion of loans that Sri Lanka owes China into equity.

U.S. officials have warned that a strategic port in the tiny Horn of Africa nation of Djibouti could be next, a prospect the government there has denied.

From 2000 to 2016, China loaned around $125 billion to the continent, according to data from the China-Africa Research Initiative at Washington’s Johns Hopkins University School of Advanced International Studies.


And a number of African countries form part of China’s $126 billion Belt and Road Initiative to link China by sea and land through an infrastructure network with southeast and central Asia, the Middle East, Europe and Africa.

China has rejected criticism of its lending in Africa. And debt campaigners point to the fact that much of Africa’s current debt load consists of commercial debt to western financial institutions or Eurobonds, which are more expensive to service than Chinese loans.

“All of these countries are sovereign states, so it’s for them to decide who they want to trade with,” Nagy said. “We feel we have an obligation to point out to them when we believe they are getting into severe economic difficulties.”

[Riaz Haq]

Sri Lanka wants its ‘debt trap’ Hambantota port back. But will China listen?


https://www.scmp.com/news/china/diplomacy/article/3040982/sri-lanka...

Critics view the deal as a symbol of the problems associated with Chinese lending and the Belt and Road Initiative, but Beijing so far shows little sign of changing its mind


Newly elected President Gotabya Rajapaksa promised on the campaign trail to revisit the agreement, but observers say he will need to offer China something else in return


Sri Lanka’s new government wants China to hand back a port it was given two years ago to cover its debts – but its chances of success appear slim.
The port, located at the heart of a busy shipping route in southern Sri Lanka, has been held up by critics as a symbol of the worst aspects of China’s “debt trap diplomacy” with many locals regarding it as a sign of subordination to Beijing.
Gotabaya Rajapaksa, brother of the former leader Mahinda Rajapaksa, was elected president last month after a campaign where he promised to undo the port deal.
“The perfect circumstance is a return to the norm,” Ajith Nivard Cabraal, a former central bank governor under Mahinda Rajapaksa, who is now serving as prime minister.
“We pay back the loan in due course in the way that we had originally agreed without any disturbance at all.”

But so far Beijing has given no indication that it will rethink its plans – instead suggesting that development plans for the port should be speeded up.

On Monday, Chinese diplomat Wu Jianghao met Gotabaya Rajapaksa to congratulate him on his election victory – but an account of the meeting by Xinhua indicated that the two countries should “speed up the implementation of cooperation on big economic projects, including the Colombo Port City and the Hambantota Port, under the existing consensus”.

Sri Lanka is not the only country in South and Southeast Asia where a new government has tried to renegotiate deals agreed as part of China’s Belt and Road Initiative.
But while Malaysia succeeded in renegotiating the contract to build the East Coast Rail Link, others such as Pakistan and Myanmar, have been less successful.
International observers said Sri Lanka’s ongoing reliance on international investment as it continues to rebuild after a lengthy civil war limited its scope to negotiate with China.
“The ability of a country to renegotiate deals would depend on its economic size, performance and strategic outlook,” said Amitendu Palit, an economist specialising in international trade and investment policies at the National University of Singapore said.
“Malaysia has been far superior in this regard. It is a middle-income country with a much stronger economy and is part of a stable regional order. Sri Lanka does not enjoy the same advantages

Sri Lanka’s debt is currently 78 per cent of its GDP – one of the highest ratios in South and Southeast Asia.
Between 2010 and 2015, China lent the country about US$5 billion for infrastructure projects including Mattala Airport – which has been widely criticised as a white elephant – and the Hambantota port.
By 2018, Chinese lending to the country had reached US$8 billion, according to the International Monetary Fund.
Sufian Jusohm, an international trade and investment professor at the National University of Malaysia, said the Sri Lankan government would need to offer China an alternative if it wanted to revise the deal.
“Sri Lanka may revoke the lease but risks paying compensation to the Chinese company for expropriating the port. In addition, this will result in a diplomatic conflict between the country and China,” he said,
“In any event, Sri Lanka may be able to persuade China to agree to a review if it can offer an alternative deal.”

[Riaz Haq]

AidData’s new dataset of 13,427 Chinese development projects worth $843 billion reveals major increase in ‘hidden debt’ and Belt and Road Initiative implementation problems

https://www.aiddata.org/blog/aiddatas-new-dataset-of-13-427-chinese...

The AidData report, Banking on the Belt and Road, offers a bird’s-eye view of China’s geo-economic strategy before and after the introduction of the BRI in 2013. It details how spending patterns, debt levels, and project implementation problems have changed over time, leveraging insights from a uniquely granular dataset that captures 13,427 projects across 165 countries worth $843 billion. These projects were financed by more than 300 Chinese government institutions and state-owned entities. The new 2.0 Global Chinese Development Finance Dataset covers projects approved between 2000 and 2017 and implemented between 2000 and 2021. It is the most comprehensive dataset of its kind.

“China has quickly established itself as the financier of first resort for many low-income and middle-income countries, but its international lending and grant-giving activities remain shrouded in secrecy,” said Ammar A. Malik, a Senior Research Scientist at AidData and co-author of Banking on the Belt and Road. “Beijing’s reluctance to disclose detailed information about its overseas development finance portfolio has made it difficult for low-income and middle-income countries to objectively weigh the costs and benefits of participating in the BRI. It has also made it challenging for bilateral aid agencies and multilateral development banks to determine how they can compete—or coordinate and collaborate—with China to address issues of global concern.”
----------------

“China will soon face higher levels of competition in the global infrastructure finance market due to the Build Back Better World Initiative and the E.U.’s recently announced Global Gateway Initiative,” said Parks. “As we enter this new era of strategic rivalry, it will be more important than ever that G7, Chinese, and host country policymakers rely on hard evidence rather than opinions or conjecture.”

[Riaz Haq]

China’s belt and road projects will help lift Pakistan from poverty, says Imran Khan
Despite questions around Pakistan’s deals with China, its PM says CPEC and Gwadar port are viewed as ‘a great opportunity’
Khan told Chinese President Xi Jinping that Islamabad would support China at any time as its ‘all-weather friend’

https://www.scmp.com/news/china/diplomacy/article/3166407/chinas-be...


“I do not understand why there is this suspicion about CPEC [China-Pakistan Economic Corridor] and the Gwadar port … what China achieved is really [why] we look at China as a role model, because never has a nation lifted so many people out of poverty as did China,” Khan said.

“This is really my main concern: how do I lift people out of poverty, how do we create wealth in our country? We see CPEC and Gwadar as a great opportunity for our geoeconomics, I think this is not exclusive between Pakistan and China. We invite any other country to join and invest in CPEC projects,” Khan said, referring to his policy on strengthening trade and investment with regional countries.
“We want to lift our poverty using the example of China,” he said.

CPEC comprises a network of roads, railways, ports, power plants, oil and gas pipelines and optical fibre cables. A main feature of the project is a road from Xinjiang in China’s far west to Gwadar port in Balochistan. Only around a third of the projects have been completed.

“The US is also a good friend of Pakistan, but it is different from the all-weather friendship with China,” Khan said, adding that in the past the US had switched between being friendly towards his nation and then sanctioning Pakistan over regional issues, including conflicts in Afghanistan.
“Pakistan-China relations have been stable for the past 70 years,” Khan said.

[Riaz Haq]

#US led #G7 to raise $600 billion to counter #China's #Belt-#Road that involves #infrastructure development in over 100 countries. #Biden, other G7 leaders relaunch newly renamed "Partnership for Global Infrastructure and Investment". #CPEC #Pakistan https://www.moneycontrol.com/news/world/g7-aims-to-raise-600-billio...

Group of Seven leaders on Sunday pledged to raise $600 billion in private and public funds over five years to finance needed infrastructure in developing countries and counter China's older, multitrillion-dollar Belt and Road project.

U.S. President Joe Biden and other G7 leaders relaunched the newly renamed "Partnership for Global Infrastructure and Investment," at their annual gathering being held this year at Schloss Elmau in southern Germany.

Biden said the United States would mobilize $200 billion in grants, federal funds and private investment over five years to support projects in low- and middle-income countries that help tackle climate change as well as improve global health, gender equity and digital infrastructure.

"I want to be clear. This isn't aid or charity. It's an investment that will deliver returns for everyone," Biden said, adding that it would allow countries to "see the concrete benefits of partnering with democracies."

Biden said hundreds of billions of additional dollars could come from multilateral development banks, development finance institutions, sovereign wealth funds and others.

Europe will mobilize 300 billion euros for the initiative over the same period to build up a sustainable alternative to China's Belt and Road Initiative scheme, which Chinese President Xi Jinping launched in 2013, European Commission President Ursula von der Leyen told the gathering.

The leaders of Italy, Canada and Japan also spoke about their plans, some of which have already been announced separately. French President Emmanuel Macron and British Prime Minister Boris Johnson were not present, but their countries are also participating.

China's investment scheme involves development and programs in over 100 countries aimed at creating a modern version of the ancient Silk Road trade route from Asia to Europe.

White House officials said the plan has provided little tangible benefit for many developing countries.

Biden highlighted several flagship projects, including a $2 billion solar development project in Angola with support from the Commerce Department, the U.S. Export-Import Bank, U.S. firm AfricaGlobal Schaffer, and U.S. project developer Sun Africa.

Together with G7 members and the EU, Washington will also provide $3.3 million in technical assistance to Institut Pasteur de Dakar in Senegal as it develops an industrial-scale flexible multi-vaccine manufacturing facility in that country that can eventually produce COVID-19 and other vaccines, a project that also involves the EU.

The U.S. Agency for International Development (USAID) will also commit up to $50 million over five years to the World Bank’s global Childcare Incentive Fund.

Friederike Roder, vice president of the non-profit group Global Citizen, said the pledges of investment could be "a good start" toward greater engagement by G7 countries in developing nations and could underpin stronger global growth for all.

G7 countries on average provide only 0.32% of their gross national income, less than half of the 0.7% promised, in development assistance, she said.

"But without developing countries, there will be no sustainable recovery of the world economy," she said.