As China emerges from the COVID-19 crisis earlier than most nations, it has the time and resources to switch focus to other priorities, such as its relations in Southeast Asia. But for those who worry that Beijing will outspend other world powers to buy influence, there’s still time for the U.S. to counter that influence, according to a former U.S. economic envoy to China. And it might not be as hard or as expensive as some think.In a new The nation that Dollar views to be most at risk of Chinese debt distress in the region is Laos, a small landlocked nation that borders China. The focus on the Belt and Road impact on Southeast Asia is relevant not only because of the region’s proximity to China but also because three of the 20 biggest borrowers in the program are in ASEAN: Cambodia, Indonesia and Laos. A fourth recommendation from Dollar may have a harder time getting traction: the U.S. could work more closely with China and join its Asian Infrastructure Investment Bank. The U.S. opposed the development bank when it was founded in 2015, urging allies like South Korea not to join, citing concerns about transparency, environmental rules and other standards. “What we don’t want to see happen is some kind of race to the bottom where the standards are diluted,” Antony Blinken, Deputy U.S. Secretary of State, said at the time. Washington has softened its stance since then, but still has yet to join the China-led bank. Such cooperation is needed, particularly as COVID-19 tears through ASEAN economies and increases their financing needs, Dollar said. “U.S. accusations of China’s ‘debt-trap diplomacy’ do not resonate with much of the developing world and make the United States seem insecure,” he said, adding one more recommendation: “Dial down the anti-China rhetoric.”
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