5 | Recommendations for U.S. Policy Makers The following broad menu of recommendations is intended to provide options for a U.S. response to the ambitious and ambiguous BRI. Given the breadth of projects and initiatives falling under the label of the BRI, an equally extensive response is required. Our economic and financial recommendations seek to mitigate the negative developmental consequences of the BRI, in terms of debt and poor project implementation, while encouraging U.S. private sector engagement to increase U.S. presence and compete with Chinese firms that are gaining a foothold in many emerging markets thanks to BRI. The political and social recommendations are intended to provide substantive ways to signal a commitment to regions that feel that China is a more credible partner while emphasizing the existing and positive U.S. impact. The regulatory and governance recommendations focus on increasing standards, using development partners, local civil society organizations, and independent media to push for higher standards and increased scrutiny on megaprojects.
Economic and Financial Options Assist countries with debt renegotiation and improve cohesiveness of BRI messaging with allies. 1. Assist countries to renegotiate Chinese debt. Helping countries get better terms in renegotiations and up-front negotiations (where efforts should also be made to encourage China to lend through multilateral institutions) helps countries avoid debt distress, lessening the likelihood that China can extract geopolitical concessions later. A joint State Department, U.S. Agency for International Development (USAID), and Treasury effort to assist in renegotiating BRI projects was successfully implemented in Burma, where it helped bring down the cost of a BRI port project by $5 billion.55 This program should be made a budgetary priority and expanded.
2. Allies should adopt uniform messaging around how BRI lending can adversely impact debt sustainability. This messaging should highlight the lack of due diligence typical in BRI investments. It should be stressed in conjunction with our allies that these projects crowd out other productive investments and may not deliver intended benefits or economic impact, particularly given the lack of due-diligence. Communication is a key part of U.S. engagement 36
