Catching China by the Belt (and Road)

WILL THE DEVELOPING WORLD FALL UNDER CHINA’S SWAY? Many policymakers in Washington certainly fear so, which is one of the reasons they have created the new International Development Finance Corp. (IDFC), which is slated to begin operating at the end of this year. Like the Marshall Plan, which in the post-World War II years used generous economic aid to fight the appeal of Soviet communism in Western Europe, the IDFC aims to help Washington push back against Beijing’s sweeping Belt and Road Initiative.

The new institution should allow the United States to better align its commercial and development goals with its foreign policy in the developing world. But the IDFC will start at a significant disadvantage: relative poverty. Whereas the new IDFC will have about $60 billion in capital, the Belt and Road Initiative is a $1 trillion