China can unlock Trump’s trillion-dollar infrastructure plan

A signature policy of Donald Trump’s campaign for US president was his trillion-dollar plan to fix America’s ailing infrastructure through a public-private partnership model, which resonated well with voters. But the realities of his ambitious plan to “make America great again” in this regard will require much support from China, both financial and material. Policy rhetoric must make way for political reality.

If a person is voted in on a wave of populism, promises must be met quickly or voter resentment will surface. This is the dilemma Trump faces in balancing the need to hit the ground running while saving face and working with China – demonised as a cause of America’s decline. History shows Trump does not object to offshoring work in his own commercial ventures.

The 2013 report card for US infrastructure indicates about US$3.6 trillion will be required by 2020, more than three times the amount Trump plans to spend. Tightening military spending and enticing corporate repatriation might seem harder to execute once in office.

Initiatives such as the Asian Infrastructure Investment Bank (AIIB) could not have come at a better time for the Chinese, given that they are awash with cash. The AIIB’s win-win objective will be very tempting for Trump, who must prove quickly he can reverse the infrastructure issues and create jobs. For the Chinese, a positive sentiment towards such an offering is expected, as they know this brings with it financial as well as political security. With the eagerness of Chinese investors for acquisitions in infrastructure, as seen in Australia, it is inevitable that their presence will increase.