Since the BRI’s launch in 2013, the Chinese have issued over $200 billion in loans, with a total investment of up to $1.3 trillion by 2027. Many warn that the BRI is on a par with the Marshall Plan — the U.S. economic recovery program that rebuilt post-World War II Europe and established the American century. They cite the figure that BRI is arguably 12 times the size of the Marshall Plan, demonstrating an even greater effort to reshape the international community by writing new rules and creating new institutions that will “reflect Chinese interests.”
And yes, China aspires to replace the United States at the center of the global community. However, the U.S. experience after World War II demonstrates that the resources required to succeed are well beyond anything the Chinese have so far planned to commit. Despite the claims of many U.S. and Chinese analysts, the Belt Road Initiative is not comparable in either scale or impact to the Marshall Plan, especially when combined with other U.S. aid programs of the period.
While China’s infrastructure spending has increased its footprint around the world, U.S. aid during and after World War II did far more, saving democracy during the war and rebuilding the world in the years following. The costs were high. But the results, which helped the world recover so quickly from such a terrible war, ultimately legitimated U.S. global leadership.
BRI promoters insist that China currently faces a much more daunting task — jockeying for influence with the United States, the E.U. and Japan — than the United States faced after World War II, when it confronted only the Soviet Union. But this ignores the horrifying aftermath of World War II and the catastrophic set of global challenges that it created. The war left tens of millions dead, destroyed countless cities, towns and villages, devastated infrastructure across Europe and Asia, and left hundreds of millions on the verge of famine. The writer John Dos Passos warned that “Americans are losing [the] victory in Europe.” Many feared the breakdown of civilization itself.
Nor was this simply a European crisis. Rather, the entire geopolitical foundation of the world was in upheaval. Britain’s global supremacy was ebbing, raising fears that the economic crisis would force London to abandon strategic positions across the world — and force the United States to fill them before the Soviet Union did. Such was the case with the Truman Doctrine, which pledged economic and military aid to Greece and Turkey in a region that had for centuries had been a crucial part of Britain’s sphere of influence. U.S. officials desperately hoped to avert further British retrenchment elsewhere around the world.
Then came the most difficult question of all: What to do with occupied Germany? As Herbert Hoover observed, the conditions of the German people “have been sunk to the lowest levels known in a hundred years of Western history.” Without a powerful German economy driving the continent, the chances of European recovery were negligible. Yet the question remained: How could the United States and its allies revive the German economy without empowering German domination of the continent?
America’s answer was to launch massive foreign aid programs and create a collaborative system of defense for the continent through the Truman Doctrine and NATO. The Truman administration extended over $10 billion in direct loans in 1946 and 1947, with $3.75 billion going to Britain alone. But even these enormous sums were insufficient to stem the economic crisis, prompting the administration to launch the Marshall Plan. Truman received congressional authorization to allocate a total of $17 billion over the course of four years, of which $13.5 billion would actually be spent. By 1951, Europe’s rapid economic recovery, coupled with the growing threat of world war, forced the United States to shift its priorities in favor of greater military assistance.
Those who claim that the BRI represents a far more massive investment than the Marshall Plan make two mistakes: First, they compare relative historical values by inflation; second, they ignore other U.S. aid programs.
Adjusted for inflation, the $13.5 billion spent on the Marshall Plan is today equal to $130 billion, less than a tenth the size of the BRI. Inflation is useful to compare costs of commodities: the price of a loaf of bread, a gallon of milk, a pound of butter. However, the Marshall Plan isn’t a commodity, and given its scale, the most accurate comparative measure is percentage of GDP, that is, how much of the U.S. economic pie went into the program. By using GDP, the true scale of the Marshall Plan — indeed, all U.S. aid programs — becomes clear. Truman asked Congress for $17 billion in 1947, almost 7 percent of GDP, or about $1.4 trillion today, roughly what the Chinese allege they will invest in the BRI. The actual $13.5 billion spent equals about $1 trillion today. China’s actual spending over six years totals about $200 billion.
And the Marshall Plan was one part of the overall U.S. economic program. In 1941, President Franklin Roosevelt launched the Lend-Lease aid program to sustain Britain during the war. Eventually, the United States would provide $43 billion dollars in aid to dozens of countries, including Britain, the Soviet Union and France. That represents about $4 trillion relative to current GDP, the vast majority of which was never repaid.
After the war, the United States extended $10 billion in direct loans, or about $900 billion relative to current GDP, with very favorable terms. Britain paid the last installment of its loan in 2006. Altogether, from 1941 to 1951, the United States spent a staggering $6 trillion, adjusted for inflation, on those three foreign assistance programs. These figures do not include costs associated with the occupation of Germany and Japan or other aid offered to countries throughout Asia and the Pacific.
But statistics only tell part of the story. The main aid in BRI comes in the form of loans, many for projects that lack economic feasibility and risk becoming debt traps for participating countries. Fearing that more loans could lead to a similar European debt trap, the United States issued Marshall Plan aid as grants, with the proviso that participating nations match this aid with their local currency and coordinate their economic planning, a historic first. Growing economic coordination led to a Pan-European partnership that paved the way for the European Coal and Steel Community and, eventually, the European Union. Finally, according to Volker Berghahn of Columbia University, the Marshall Plan stimulated private U.S. investment that helped spark Europe’s rapid economic growth in the 1950s.
America became a world leader because of its vast commitment to defeat Nazi Germany and Imperial Japan, to rebuild the world once the war ended and to protect its allies from Soviet communism — all at a cost that is beyond comprehension today. Though the BRI has already extended China’s influence throughout Asia and Europe, its scope is unlikely to reshape the current international system.