Integrating Infrastructure in U.S. Domestic and Foreign Policy: Lessons from China

Abstract

Infrastructure policy is generally regarded, and managed, as an element of domestic policy. But an examination of U.S. foreign policy in the post-WWII period, and of China’s foreign policy in the period starting in the 1980s, demonstrates that infrastructure policy has played a significant foreign policy role, greatly expanding the influence of each nation, and enhancing its international standing during such periods of expansionism. However, in recent decades—since 1970—the U.S. and China have found themselves on divergent infrastructure policy paths. While China has aggressively invested in and built infrastructure both at home and overseas, the U.S. has essentially withdrawn from systematic investment in infrastructure, leading to the decay of physical infrastructure at home and a coincident loss of economic influence on the international scene.

This paper examines the reasons that U.S. and Chinese infrastructure policy have diverged. It discusses the economic benefits of infrastructure investment and more specifically explores the economic factors governing infrastructure export, arguing that China’s infrastructure expansionism is driven as much by economic considerations as by global ambitions. It explores the factors that have combined to limit U.S. infrastructure investment over the past 50 years. Finally, it argues that lessons drawn from China’s integration of domestic infrastructure policy with foreign policy provide a model for a new U.S. infrastructure policy approach. It suggests a new framework by which to re-establish robust investment in U.S. infrastructure and to place infrastructure policy at the center of U.S. global engagement.

By greatly expanding the scope of U.S. infrastructure investment to include private funding from the U.S. and abroad, and by returning to its post-WWII stance of aggressively exporting its infrastructure capability, the U.S. can, the paper argues, establish an effective counterweight to China on the global stage and secure a stable investment stream independent of limiting political factors to rebuild U.S. infrastructure for the 21st Century. Finally, it suggests that the infrastructure arena might be a basis for an engagement with China that could benefit both economies.