U.S. to Establish USIDFC to Keep China's One Belt One Road in Check

The United States is planning to set up an international investment organization that has US$60 billion in assets in order to hold China's One Belt One Road initiative in check.

Reuters reported on October 3 that the U.S. Senate passed a bill regarding the establishment of the U.S. International Development Finance Corporation (USIDFC). The House of Representatives gave bipartisan support for the bill, which is expected to be signed by President Donald Trump on October 5.

Once the bill becomes effective, the USIDFC is launched as an organization combining the Overseas Private Investment Corporation (OPIC) and other overseas development agencies of the United States. The new organization’s investment limit is US$60 billion and equity investment is possible as well. Existing agencies’ role has been limited to loan offering for infrastructure projects in developing countries.

The new bill is to keep the Chinese initiative in check. At present, China is increasing its investment in Asia and Africa based on the initiative, attempting to increase its influence in the regions. Last year, China made a direct investment of no less than US$20.17 billion in the 64 countries taking part in the initiative.

The U.S. has complained about the initiative. For example, it said in August that fund inflow from the IMF to the 64 countries may be blocked in the future. In July, the U.S. announced a plan to invest US$113 million for technological, energy and social infrastructure development in the Indo-China region.