Since 2013, when Communist Chinese President Xi Jinping first introduced his Belt and Road Initiative (“BRI”), it has become the largest infrastructure program in history, shifting supply chains and geopolitics to China’s favor. From that basis, the initiative has shaped global trade, debt distress, and security relationships, making the BRI a central arena of the U.S.-China competition.
The BRI is a global initiative to counter longstanding U.S. geopolitical dominance and geo-economic advantages by connecting China to the world through large-scale physical and digital infrastructure projects. As of 2025, it has financed infrastructure projects in over 140 countries.
Further, the BRI has conducted over $1 trillion in infrastructure development through its Export-Import Bank and China Development Bank. This has enabled these institutions to become the world’s largest creditors, surpassing the U.S.-backed World Bank and the International Monetary Fund (IMF). This has given China increased leverage in BRI countries, as the loans used to finance projects are often extended to countries with limited fiscal capacity, which has increased the risk of debt distress. This has allowed Chinese-backed firms to take control of assets in strategic locations around the world. For example, in the case of Sri Lanka’s Hambantota Port, the government was unable to service the project’s debt, which was commercially unviable. It then leased it to a Chinese firm for 99 years, giving China strategic control over a key waterway.
Chinese expansion can also be found in Djibouti, a strategically located country at the mouth of the Red Sea. Heavy government debt in the country to Chinese-backed development banks coincided with the construction of Beijing’s first overseas naval base.
These strategic implications extend beyond the realm of physical infrastructure. China’s Digital Silk Road has increased its footprint in meeting the demands of an increasingly digital world.
With global tensions increasing in the “New Cold War,” these initiatives could be crucial for China as it seeks to strengthen its economic and military position. The U.S. cannot simply urge other nations to reject China’s push without offering an alternative: a strategy rooted in high-quality infrastructure, development finance reforms, and strategic investments. Geopolitical investment will be necessary to counter this new maritime, land-based, and digital Silk Road of the 21st century.
The Development Finance Corporation (DFC), established under the Build Act, serves as the primary tool for U.S. global infrastructure development. It has also played a central role in global initiatives such as the Partnership for Global Infrastructure Investment (PGII), which incorporates private-sector investments and supports other programs to promote high-quality, transparent infrastructure standards. However, questions remain around these programs regarding scale, financing, and project timelines. To date, the DFC has invested $49.3 billion across 132 deals, compared with $92 billion across 210 deals by the BRI.
The rollout of many of these programs has not been without problems. The PGII, which aims to mobilize $600 billion in investments by 2027, was still not fully operational in 2025, while agencies like the DFC must be periodically reauthorized by Congress. In fact, the government-owned bank was briefly expired in fall 2025 amidst political deadlock before an extension was passed lasting until 2031. These disruptions have created financing and planning problems, leaving projects in many countries unclear.
Aside from financing, coordination across agencies can affect project timelines and complicate permitting processes for infrastructure projects, not to mention a lengthy permitting process that can delay construction for years. On the other hand, China uses its strong central authority to push projects out in months, though these are almost certainly lower quality in terms of safety, environmental preservation, and overall build quality of the infrastructure.
Factors such as interagency coordination, program rollout, and a lack of an overall national strategy could explain why, despite strong standards and financing capacity, oftentimes U.S.-backed initiatives face rollout challenges, and why many host countries may be more inclined to utilize the more centralized system China uses to conduct its international infrastructure development initiatives.
It is also essential to recognize that there are many outstanding gaps in the infrastructure arms race, regardless of geopolitics. There is a massive shortfall in global infrastructure financing, with the World Economic Forum citing a $15 trillion gap between projected investment and the amount needed to ensure adequate global infrastructure by 2040. Every country wants better, newer infrastructure.
While neither the U.S. nor China has closed this infrastructure gap, China has been able to move faster and on a larger scale than the United States, allowing it to expand its global footprint in trade, international institutions, and security. This rate of growth and expansion, however naturally looks more impressive given the starting positions, with the U.S. already dominant world-wide and China only opening up in recent decades. If the U.S. effectively leverages its comparative advantages over China, such as the availability of private capital, the rule of law, higher infrastructure quality, lifecycle performance, technical expertise, and innovation, it could better counter China to close the gap and ensure the U.S. indefinitely outclasses would be competitor nations.
There are several factors that could shape whether or not the U.S. and allies can offer a credible alternative that will be appealing to high-need countries with constraints:
- Greater standardization aligned with internationally recognized infrastructure-quality standards (five Ise-Shima principles) could reduce transaction costs and shorten project timelines.
- Emphasizing the potential benefits associated with lifecycle costs, results, and local participation (citizen-centric models) could improve long-term fiscal sustainability and project viability.
- The use of public-private partnerships (PPP) to utilize private capital and innovation in regions where public financing is limited.
- Institutional capacity within existing development finance structures to operate at sufficient scale, speed, and risk tolerance in high-need regions.
- Streamlining interagency processes to increase competitiveness against Chinese systems, as seen with efforts such as the BRIDGE Act
Infrastructure development remains critical to achieving U.S. strategic interests. While U.S. policymakers have begun to refocus and invest in efforts to counter Chinese global infrastructure expansion, the U.S. still has a long way to go to turn its agenda into reality.
Written by Trevor Mathia, Public Policy Intern
The Alliance for Innovation and Infrastructure (Aii) is an independent, national research and educational organization working to advance innovation across industry and public policy. The only nationwide public policy think tank dedicated to infrastructure, Aii explores the intersection of economics, law, and public policy in the areas of climate, damage prevention, eminent domain, energy, infrastructure, innovation, technology, and transportation.