Three months after the U.S. President signed a new legislation to enhance American influence in the Indo-Pacific region, the seniormost official of the Donald Trump administration has clarified the new Better Utilization of Investment Leading to Development (BUILD) Act does not intend to match China ‘dollar for dollar’ and confront the dragon’s supremacy over the strategic corridor.
The newly-formed Indo-Pacific framework remains inclusive and welcoming to Chinese participation only if the East Asian behemoth does not subscribe to the “predatory and coercive” tactics it had enforced previously during investments into the Hambantota Port, Sri Lanka, said Thomas L. Vajda, Deputy Assistant Secretary, Bureau of South and Central Asian Affairs.
“We welcome the Chinese economic activity in the region but only if it meets the prescribed international standards for free, transparent processes, sound and merit-based procurement practices. The problem is, we have seen China not following such rules in the past, resulting in corruption at Hambantota. The [Chinese] approach is and remains antithetical to the principles we [Americans] espouse,” said Mr. Vajda, reiterating the American commitment and support to India’s regional ambitions in the Indo-Pacific through the provisions of the newly instituted BUILD Act.
The U.S. President had signed the Act in October last year to enhance American influence in the Indo-Pacific, calling on India to strengthen economic ties in the face of Chinese action “undermining” the rule-based system in the region. The Act also created an international Development Finance Corporation with a lending limit of $60 billion to facilitate private sector investments globally, including in the region. During his visit to Mumbai, Mr. Vajda has held meetings with the private sector to discuss possibilities of equity investments with partner finance institutions. This will ensure the Indian companies understand how to tap into the opportunities arising out of the new framework, he explained.
Stressing on the economic value of the regional Quad — an informal grouping of India, U.S., Japan and Australia — Mr. Vajda explained the strategic partnership is not a net to curb Chinese influence in the region. Under the Act, the American intent is not to match China “dollar for dollar”, but rather, to incentivise the private sector by providing trillions of dollars required for infrastructure development in the region.
He said, “Our goal is not to behave like China or match them dollar for dollar. On the contrary, economic growth and governance remain the two central pillars of the American Indo-Pacific vision. The Quad itself is a like-minded gathering of four democracies who have a similar vision for the region. It is not a military enterprise.”