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China-US relations: American funding tool struggles to compete with belt and road, particularly in Latin America: DFC chief
- Head of US International Development Finance Corporation calls on members of Congress to review the eligibility criteria for funding to help build partnerships
- US House Committee on Foreign Affairs member warns DFC must not become solely a tool for foreign policy
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Igor Patrickin Washington
One of the United States’ key tools to counter China’s Belt and Road Initiative is running into legal obstacles that hamper its ability to compete with Beijing in regions such as Latin America and the Indo-Pacific, a House panel was told on Tuesday.
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The US International Development Finance Corporation (or DFC) was created in 2018 after the merger of several US government financing and investment mechanisms that focus on developing countries.
The idea at the time was to counter China’s belt and road infrastructure programme, prioritise partnerships with the private sector and present a financially sustainable alternative to Beijing-funded projects.
However, since its launch, the DFC has been repeatedly criticised by developing countries for its restrictions, reduced availability of funds and its slow approval of projects.
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Compared to the nearly US$1 trillion invested by China in belt and road projects around the world, for example, the DFC was limited to a maximum contingent liability of US$60 billion.
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