[EAI Working Paper] Global Political Economy Order Series Post-COVID Crisis ④_ COVID-19 and the Changing Order of Global South Political Economy: Deepening US-China Strategic Competition and Sino-Indian Regional Conflict

I. Introduction: The Complex Crisis of COVID-19 and the Global South

The novel infectious disease COVID-19, which originated in Wuhan, China, in December 2019, was declared a global pandemic by the World Health Organization (WHO) on March 11, 2020. This plunged not only the Global South, where developing countries are located, but also the Global North, comprising developed countries, into domestic and international health security crises. In fact, most developed countries, including the G7, have produced failed outcomes akin to failed states in their response to the COVID pandemic, making it difficult to distinguish between developed and underdeveloped nations. This has led to fundamental questions being raised about the relationship between authoritarianism and democracy, suggesting that the political system best suited for responding to COVID-19 may not necessarily be liberal democracy.[1] The decline of globalization in international relations and the return to nationalism are accelerating the decay of the liberal international order (LIO) that has maintained the global order to date. Through US-China strategic competition, this trend is driving the leading powers to promote their own development concepts, goals, and operational principles as new global norms, thereby leading the post-COVID-19 world political and economic order. The intense competition between the US and China is more likely to lead to a struggle for global hegemony through conflict rather than cooperation, thereby weakening the governance system for regional and global response cooperation to COVID-19.

Alongside the changes in the international political order due to the health crisis, the global economy is also in crisis as major developed economies have retreated into self-centered protectionism due to the shock of COVID-19. If the supply of vaccines and treatments is not adequately provided to both the Global North and South, and if developed countries in the North monopolize production and supply chains, the impact of COVID-19 on the global economy will be differentiated. The overall global economic crisis is likely to be prolonged due to the underdevelopment of the Global South. While the recovery from COVID-19 is differentiated between the Global North and South, with the economic recovery in the North following a U-shaped trajectory, the recovery in developing countries in the South is likely to follow a long-term slump similar to an L-shape. Combined, this signifies an acceleration and deepening of global economic imbalance and inequality, often referred to as a 'K-shape'.[2] Economic inequality between developed and developing countries in the post-COVID-19 era, linked to the intensification of US-China strategic competition, poses a significant obstacle to the functioning of global governance for vaccine supply, climate change, and economic recovery. It could also lead to changes in the international division of labor. Therefore, the US and China need to formulate grand strategies for the Global South in the post-COVID-19 era.

The health crisis faced by the Global South in the era of COVID-19 is not merely a disease issue confined to underdeveloped countries and regions in the South (Applebaum 2020). United Nations (UN) Secretary-General António Guterres warned in 2020 that the health crisis in the Global South would escalate into food crises, climate crises, and development crises, and that the lack of rapid response measures to the health crisis could lead to an overall development crisis.[3] In other words, for developing countries in the Global South, COVID-19 is not an issue that can be resolved simply by vaccine supply within the framework of a health crisis. The shock of COVID-19 severely impacts the government debt of developing countries, and resolving debt issues is intricately linked to economic recovery in the post-COVID-19 era, making it a complex issue. If developing country governments fail to resolve their debt problems, it will inevitably impact economic recovery. Failure in economic recovery will lead to social problems such as hunger, poverty, health, and education, and could even trigger conflicts and civil wars due to increased social instability. This complexity of the COVID-19 shock in the Global South is not confined to the regional dimension of the Global South and developing countries; it rapidly transcends borders due to the transnational nature of the pandemic, transforming into a global issue (Khoo 2020).

From an international political perspective, the 'black hole' of the complex health crisis in the Global South will cause structural chaos in global governance in the post-COVID-19 era and act as a highly critical independent variable that severely impacts the US-China strategic competition dynamic. The United States and China must recognize the collective of developing countries in the Global South, one of the important actors in the international community, as a crucial partner for cooperation in rebuilding the post-pandemic international political order and incorporate them into a new civilizational order. The economic crisis and delayed economic recovery in the Global South due to COVID-19 will lead to a deepening of inequality and development gaps between the North and South. This 'black hole' of COVID-19 in the Global South will, with immense centrifugal force, rapidly absorb the massive financial aid—including humanitarian assistance, development aid, debt relief, and investment—that the US and China are injecting into the Global South (McCann and Matenga 2020). The impact of the COVID-19 shock in the Global South negatively affects the political economy of the Global North as well; therefore, the pandemic's damage to the Global South should not be dismissed as a problem solely for the South to bear. Instead, it must be recognized as a shared international problem that must be embraced by the leading powers spearheading new civilizational standards and the global political-economic order. If the pandemic in the Global South is left unaddressed, the damage to the entire global political economy will continue to boomerang. Consequently, the US and the G7, which have focused on domestic COVID-19 prevention and vaccine procurement, and China, which competes with them, have begun efforts to rescue the Global South from the shock of COVID-19, including promising vaccine supplies to the Global South.

However, there is a difference in the level of intervention in the Global South between the US and China in the post-pandemic era. China is actively supplying vaccines it developed to developing countries in the Global South and strengthening existing development cooperation projects such as the Belt and Road Initiative (BRI) compared to the US. Although not located in the Global South, China is generally classified as a developing country within the broader Global South. China actively participated in the 1955 Asian-African Conference held in Bandung, Indonesia, inheriting the core values of the Bandung Conference, such as South-South Cooperation and mutual solidarity. This provides China with ample historical experience and justification to actively intervene in the current COVID-19 crisis in the Global South (Kim Tae-gyun and Lee Il-cheong 2018). Meanwhile, the US, having focused on recovering from its own COVID-19 damage and developing and distributing vaccines, has implemented limited supply of its vaccines to developing countries. Its strategy to counter China's interventionism was only concretized later at the G7 Summit held in Cornwall, UK, in June 2021. Furthermore, the US, in coordination with Europe, is pursuing a strategy to build a counterweight to China within the Global South by making India, a key country in the Global South, a strategic partner. Consequently, while the 'vaccine war' between the US and Western Europe was aimed at preventing vaccine outflow from their own countries, a critical interpretation suggests that China pursued a different kind of war by rapidly supplying vaccines to developing countries.[4]

Accordingly, the political and economic order where US-China strategic competition intersects with the Global South in the context of COVID-19 is forming along two major fronts. First, the independent variable of the COVID-19 shock creates a competitive front between the US and China to seize influence in the Global South in the post-COVID-19 era. A key issue connected to this is which choice the group of developing countries in the Global South will make between the US and China to achieve economic recovery and health security amidst the clash and compromise between American and Chinese civilizational standards. Second, a new front of conflict and cooperation is being established between China and India over hegemony within the Global South (Smith 2014; Lintner 2018). China has long been consolidating a platform for expanding its hegemony in the Global South through its BRI policy and is pursuing its own strategy to upgrade this through COVID-19. In contrast, India is strengthening its economic cooperation with the US and Europe during the COVID-19 phase and participating in US-led regional cooperation platforms such as the Indo-Pacific strategy led by the US and Japan. This indicates a tendency for US-China strategic competition to transform into Sino-Indian competition within the Global South.

This chapter seeks to answer the following two macro-level questions that are expected to arise as the unprecedented health crisis of COVID-19 necessitates a paradigm shift in governance, from health issues to the political and economic order of the Global South. First, it attempts to analyze how the US and China are expanding their influence within the Global South by supporting vaccine supply and economic recovery, thereby stabilizing international health security and the global economic order. Second, it attempts to analyze how the conflict between China, which seeks to expand its hegemony by leveraging the COVID-19 crisis within the Global South, and India, which opposes China's strengthening hegemony through its alliance with the US and the European Union (EU), connects with the US-China strategic competition.

II. COVID-19 as a Critical Juncture: A Shift in Civilizational Standards

The spread of COVID-19 in the Global South and its transformation into a complex health crisis should be recognized not merely as a change in external conditions, but as a critical juncture in history that fundamentally shakes the political economy of the Global South and the relationship between the Global South and North. Historical environmental changes that serve as critical junctures cause visible physical, institutional, and cultural changes between the periods before and after the juncture. If the existing institutional framework exhibits path-dependence and cannot regulate these changes, it either ceases to function or requires significant efforts, such as institutional reform or complete transformation into entirely new institutions, to regulate the differences (Calder and Ye 2004; Thelen and Steinmo, 1992). COVID-19 can be understood as a critical juncture that interrupts the path-dependence of the existing international political economy. In this context, the political and economic shocks and damages sustained by the Global South following the outbreak of COVID-19, along with the differentiated interventions by the US and China and the escalating conflict between China and India for influence within the Global South, can be analyzed as variables of COVID-19. Therefore, COVID-19 is a historical exogenous variable that has brought civilizational shock to the entire world, including the Global South, and is the most crucial independent variable causing the political and economic crisis and transformation in the Global South.

If the shock of COVID-19 has acted as a destructive variable, sufficiently altering the civilizational order and standards of international society, then the competition and conflict between the US and EU, which aim to restore the liberal international order, and China, which promotes a new civilization, are expected to accelerate due to COVID-19. This macro-level civilizational process incorporates the English School's concept of 'standards of civilisation' and its historical sociological discussions on the long-term persistence of civilizational standards, which explain the historical evolution of international society through dialectical governance of order/justice or pluralism/solidarism (Bull 1995; Buzan 2014; Gong 1984). When historical events occur that cause a large-scale qualitative transformation, leading to the readjustment of the attributes and rules of order/justice and pluralism/solidarism, a structural transformation of the international order is triggered. As the structural history of the era changes, the structure of international politics is reorganized, with the emergence of a new hegemonic power and the establishment of new civilizational standards, leading to the realignment of international norms and order according to the new hegemony and civilizational criteria. As summarized in [Figure 1], the international community has seen the reconstruction of new civilizational orders at major historical turning points, from ancient Greece/Hellenism to 21st-century neoliberal globalization. These civilizational standards have been primarily established and normalized by new hegemonic powers and the states that follow them.

[Figure 1] Historical Evolution of International Society and Civilizational Standards

Source: Kim Tae-gyun 2021, p. 47.

If we consider COVID-19 in 2020 to have generated ripple effects significant enough to cause seismic shifts in the international order and justice, then it can be assessed that the complex pandemic has already passed the critical point of qualitative transformation of existing civilizational standards (MacMillan 2020; Kim Sang-bae 2020). During the pandemic, the COVID-19 variable has accelerated the existing US-China strategic competition, exacerbated climate and environmental crises due to environmental degradation, expanded the digital divide in the Global South through the proliferation of digital political economy driven by non-face-to-face interactions, and turned health security, through vaccine diplomacy and monopolization of vaccine supply chains, into a new strategic asset in the US-China competition. China has a long history of exchange and cooperation with the Global South through South-South cooperation. Since officially proposing the BRI at the Asia-Pacific Economic Cooperation (APEC) Summit in 2014, China has been pursuing its economic plan, which combines the land-based Silk Road Economic Belt and the maritime 21st Century Maritime Silk Road, with partner developing countries. Although China's leadership in the Global South faced issues due to widespread dissatisfaction and criticism of the BRI from partner countries, China's proposal of 'Belt and Road Initiative 2.0' in 2019 aimed to address these problems with partner countries. The COVID-19 outbreak in 2020 presented a significant obstacle to the BRI but also provided an opportunity for improvement through initiatives like the Health Silk Road and vaccine diplomacy, thus serving as a crucial historical moment for establishing China's new civilization in the post-pandemic era. The Biden administration in the US also proposed 'Building Back Better World (B3W)' at the 2021 G7 Summit to counter China's strategy in the Global South, promising large-scale support for infrastructure projects in developing countries. However, concrete implementation plans have not been presented since then, and the supply of vaccines to developing countries has been limited. Consequently, the US has been evaluated as not yet concretizing efforts to connect and address Global South issues with the opportunity of changing civilizational standards compared to China.[5] Therefore, rather than a complete transformation of the political economy of the Global South and the relationship between the Global South and North due to COVID-19, the impact of COVID-19 has acted as a catalyst for complex changes in the political economy of the Global South, accelerating the pace of change or expanding the scope of change as existing historical paths pass through the prism of COVID-19.

[Figure 2] Pattern of K-shaped Economic Recovery Post-COVID-19[6]

As shown in [Figure 2], the economic side effects of the COVID-19 shock on the Global South are expected to manifest as a K-shaped economic recovery. Therefore, how the US, Western Europe, and China will embrace the recovery of the political and economic order in the Global South in the post-COVID-19 era will be a critical issue. During the economic downturn caused by COVID-19, developed and developing countries shared the economic crisis in a similar manner. However, upon entering the recovery phase, the difference in recovery capacity will widen significantly, ultimately formalizing an unequal structure where the Global South continues to fall into a 'black hole' of economic crisis. Developed countries in the Global North are expected to show rapid recovery, particularly in high-tech industries such as information and communication technology, software, e-commerce, and biotechnology. In contrast, developing countries in the Global South will rely on primary industries like food services, tourism, entertainment, traditional retail, and small and medium-sized enterprises, mirroring the dichotomy between the core and periphery described in dependency theory.[7] The inequality between developed and developing countries resulting from the K-shaped economic recovery will lead to debt problems and inflation in developing countries, making economic recovery in the Global South impossible and likely leading to their exclusion from the global economic recovery process in the post-pandemic era.

Meanwhile, in the post-COVID-19 era, the international community has planned efforts for global economic recovery, but large-scale initiatives to support the Global South have not yet been fully implemented. The International Monetary Fund (IMF) is pursuing a plan to increase Special Drawing Rights (SDR) by $650 billion, which are to be used restrictively for the public sector, to support countries' responses to COVID-19. Recent meetings such as the G20 Finance Ministers and Central Bank Governors Meeting have also supported the expansion of SDR.[8] However, the SDR expansion applies to all countries worldwide, and no separate expansion plan for developing countries has been announced yet. The most crucial measure for the economic recovery of the Global South is the smooth supply of vaccines. Despite over 5.7 billion doses of COVID-19 vaccines administered globally, only 2% have been administered in African countries, and a grim forecast from the WHO suggests that the vaccination rate in Africa will not exceed 10% by the end of 2021.[9] The COVAX Facility, established in June 2020 by the WHO, Gavi, and others to ensure equitable vaccine distribution to all countries, including low-income nations, has shown tangible results by providing vaccines to 92 low- and middle-income countries. However, according to the WHO, a significant number of recipient countries are experiencing vaccine shortages, leading the WHO to strongly criticize the monopolization of vaccines by developed countries in the Global North.[10] Specifically, to overcome vaccine monopolization, the suspension of intellectual property rights held by vaccine manufacturers, sharing of vaccine manufacturing technology, and its transfer to developing countries have been discussed. US President Biden also pledged a temporary suspension of intellectual property rights for vaccine manufacturing. However, the UK and the EU have strongly opposed this, and the World Bank (WB) has warned that suspending intellectual property rights would hinder the development and research of vaccines against mutant viruses.[11]

In this context, the ultimate solution for vaccine supply and economic recovery in the Global South lies not in the dysfunctional international community but in the strategic choices and initiatives of major powers like the US and China. In the post-COVID-19 economic recovery phase, the most critical issue is which major power, the US or China, will actively embrace the unequal structure of economic recovery in the Global South and inject aid for vaccine supply and economic reconstruction. In other words, the shock of COVID-19, coupled with US-China strategic competition, is acting as a historical turning point where new civilizational standards can be established, depending on how the US and China approach the development crisis in the Global South, which is emerging as a black hole in international relations.

III. China's Strategy for the Global South and its Political-Economic Implications

China's strategy for the Global South fundamentally differs from that of the US and EU because China itself is not a traditional developed country in the Global North, centered on liberal democracy and market economies. Since the Bandung Conference in 1955, China has a historical record of providing development aid, including technical cooperation and concessional loans, to socialist countries in Africa for mutual solidarity and South-South cooperation (Brautigam 2009). A prime example is the Tanzania-Zambia Railway, completed in 1975, which involved a Chinese investment of a staggering $450 million. China has a history of sparing no effort in providing aid to traditional African allies. It is estimated that since 1956, China has provided approximately 900 development projects in Africa, including textile factories, hydroelectric power plants, gymnasiums, hospitals, and schools.[12] In 1964, Zhou Enlai presented five principles guiding China's aid to Africa, and in the same year, he formalized the 'Eight Principles of China's Foreign Economic and Technical Aid' in Ghana. These principles, including mutual benefit, respect for sovereignty, non-interference in internal affairs, support for self-reliance in recipient countries, non-conditionality, and equality, continue to be applied today (Rupp 2008). Since the establishment of the Export-Import Bank of China in 1994, which introduced low-interest preferential loans, China's foreign aid has gained momentum. As a key donor in South-South cooperation for the Global South, China's approach diverges from the policy norms and principles of the Organization for Economic Cooperation and Development's Development Assistance Committee (OECD DAC).

Since the 2000s, China has co-founded the BRICS (Brazil, Russia, India, China, South Africa) and launched the New Development Bank (NDB) in 2014, challenging the Bretton Woods system's World Bank and IMF at the global level. In Asia, the establishment of the Asian Infrastructure Investment Bank (AIIB) in 2013 set the stage for competition with the Japan-centric Asian Development Bank (ADB). As shown in [Table 1], NDB member countries each contributed $10 billion in initial capital, holding equivalent voting rights of 20%, adopting an egalitarian approach compared to the World Bank's equity contribution and voting rights allocation system, thereby institutionalizing a structure where no single member country can exercise a veto (New Development Bank 2014). However, in the Contingent Reserve Arrangement established in 2015 through consultations among central bank governors at the 7th BRICS Summit, China pledged the largest contribution of $41 billion, accounting for 41% of the total reserves, and received 39.95% of the voting rights, effectively becoming a veto-wielding country. This institutionalization of China's veto power within BRICS, which leads South-South cooperation in the Global South, increases the likelihood of BRICS operating under Chinese leadership. Similarly, in Asia, China provided approximately 30% of the AIIB's equity contributions, securing about 26% of the voting rights, confirming that China effectively holds the final veto power over AIIB projects and policy decisions.[13]

[Table 1] Initial Capital Contributions and Contingent Reserve Arrangement Contributions to the New Development Bank[14]

(Unit: Billion USD)

With the launch of the AIIB, Chinese President Xi Jinping presented the BRI as a practical measure to realize the 'China Dream.' Since 2013, approximately 130 countries and 30 international organizations have participated in BRI projects, with China spending about $330 billion and the debt of participating developing countries estimated at around $380 billion. The BRI projects can be interpreted as a means to leverage infrastructure development projects in developing countries for the globalization of China's economic competitiveness, along with the purpose of strengthening the leader's leadership through the mobilization of government, market, and society, similar to state development projects in Western countries, in response to domestic political and economic crises in China that could potentially escalate into regime crises (Ye 2020). The main structural problems encountered during the implementation of BRI prior to COVID-19 can be summarized into three points:

First, it is pointed out that the high interest rates on loans provided by China for BRI projects have created severe debt problems for implementing developing countries, ultimately leading them into a debt trap (Hurley et al. 2018). As shown in [Figure 3], China has provided ODA for BRI to high-risk countries within the OECD country risk classification. For instance, in high-risk countries like Pakistan, Iran, Venezuela, and Laos, infrastructure construction resources were supported, but due to failed debt repayment, these participating countries are now suffering from exploding national debt. Pakistan, for example, declared a moratorium on debt repayment due to the China-Pakistan Economic Corridor (CPEC) project and has applied for IMF bailout funds (Dadwal and Purushothaman 2017). Furthermore, due to severe debt problems, participating developing countries in BRI have frequently transferred or leased critical infrastructure facilities to China. Sri Lanka, unable to repay loans for the Hambantota Port construction project in the south, financed with Chinese capital, leased the port to China for 99 years. Greece leased the Port of Piraeus to China for 35 years. Zambia declared default on its massive debt incurred from China's BRI port infrastructure projects, leading to IMF intervention. Djibouti has faced the worst-case scenario of having a Chinese military base constructed at its port (Downs et al. 2017). Additionally, in Montenegro, Eastern Europe, the construction of a highway between the Adriatic Sea and Serbia, financed by a $1 billion loan (85% of the construction cost) from the Export-Import Bank of China in 2014, was undertaken by a Chinese road and bridge company but is currently suspended. If the $1 billion cannot be repaid, Montenegro faces the possibility of default and IMF bailout, similar to Zambia, or long-term lease, similar to Sri Lanka.

[Figure 3] Scale of ODA for BRI Provided to High-Risk Countries, 2013-2020[15]

Second, the method of infrastructure aid under BRI carries the characteristics of highly risky tied aid (Kim Tae-gyun 2018). BRI infrastructure projects involve loans provided by the Chinese government for infrastructure construction in participating countries. These infrastructure projects are then carried out by Chinese companies, employing Chinese labor, with little to no employment for local workers. Upon completion of the project, the participating country is responsible for repaying all debts to the Chinese government. Chinese companies procure necessary materials from mainland China, Chinese workers carry out the construction, and after the project's completion, Chinese workers often do not return to their home country but establish Chinatowns, leading to a strong tendency to dominate the local economy. Consequently, the primary beneficiary of BRI projects is China, the donor country, while the contribution to the national economic development of the recipient developing country is low. This has led to persistent complaints from developing country partners about 'land grabbing' (Brautigam and Zhang 2013). A representative example is in Ecuador, where Chinese mining companies have colluded with the Ecuadorian government to seize the lands of local indigenous communities and operate mines unsustainably, provoking backlash from indigenous peoples.[16]

Third, due to excessive BRI infrastructure investment, China itself, as the provider, faces issues with securing BRI funding and its foreign exchange reserves (Ye 2020). The increase in overseas investment by Chinese companies through BRI and the failure to recover invested funds from developing countries have led to a rapid depletion of China's foreign exchange reserves. Consequently, China's own financial capacity is facing problems, and it is widely believed that there are limitations to sustaining BRI infrastructure projects centered on funding and institutional support. Post-COVID-19, with an increased focus on China's domestic economic recovery, the country has reached a stage where it must revise the initial plans for BRI.

Accordingly, the Second Belt and Road Forum for International Cooperation was held in Beijing in April 2019, where the Chinese government indirectly acknowledged the structural problems of the BRI over the past period. It proposed transparent international cooperation through various methods such as bilateral, trilateral, and multilateral cooperation, advocating for multilateralism based on the principle of shared commonality.[17] In particular, President Xi Jinping stated in his opening speech, 'We will prevent debt risks, promote green development, and enhance transparency of projects.' This acknowledged the severity of the debt problems faced by participating countries during the implementation of BRI projects. He showed an inclusive attitude by promising debt relief and accommodating the position of debtor nations in debt negotiations with partner countries, announcing an improvement plan to pursue BRI cooperation with more countries in line with international standards in the future.[18]Furthermore, President Xi Jinping stated that in line with the trend of the Fourth Industrial Revolution, new growth engines and development paths should be explored and the Digital Silk Road (DSR) should be constructed, while simultaneously emphasizing the need to continue the science and technology innovation action plan for BRI innovation. If the initial goals of the BRI, which began with the Silk Road Economic Belt and the 21st Century Maritime Silk Road, focused on the development of BRI participating countries and the promotion of China's trade, then over time, the evaluation of BRI has shifted from development to addressing the political and economic issues of participating countries, namely debt, corruption, political scandals, and environmental pollution, leading to an interpretation that emphasizes international standards, transparency, and sustainability. [19]

The linkage of the NDB, AIIB, and BRI represents China's globalization strategy to promote internal economic development and occupy the industries and global supply chains of developing countries in the Global South. This strategy encountered an unprecedented health crisis in 2020 with the outbreak of COVID-19. Since the official launch of the BRI in 2013, the COVID-19 pandemic has acted as the most negative factor affecting BRI projects. Above all, due to COVID-19, BRI participating developing countries began to prioritize their domestic epidemic prevention policies, causing economic cooperation and infrastructure construction with China to be relegated in priority within the participating countries' major government policies. [20] Within China itself, large-scale lockdown policies, factory closures, reduced production capacity, and travel bans for Chinese labor posed a risk of the collapse of BRI's core value chains. Similarly, international trade faced restrictions on the movement and import/export of construction materials and equipment necessary for implementing BRI infrastructure construction projects, raising skeptical views on the sustainability of BRI in the pandemic era. Moreover, as the origin of the COVID-19 outbreak was Wuhan, China, and China and the WHO were criticized by the international community for a delayed response in its expansion into a pandemic, anti-civilizational perceptions such as framing COVID-19 as a type of 'yellow peril' and the 'China virus' spread in Western Europe. [21]

However, while China's BRI was impacted by the COVID-19 pandemic, China is also pursuing a more aggressive global South support policy compared to the United States through strategic adjustments, and the political space for 'China Standard' and China-led globalization is likely to expand. The impact of COVID-19 led developed countries of liberal democracy in the US and Europe to focus on resolving their domestic COVID-19 issues, creating a political vacuum in global leadership for responding to COVID-19, at least until the Biden administration took office. The crisis of the global health governance system, centered on the WHO, continued without proper functioning. In the context of US-China strategic competition, China is utilizing COVID-19 as an opportunity to bypass conflicts such as the Hong Kong pro-democracy movement and the US-China trade war. By modifying and supplementing the BRI with strategies that actively respond to the COVID-19 crisis, China is planning a long-term strategy to counter the US encirclement through the rebuilding of the Chinese economic sphere and to expand its global leadership for a China-centric international order and hegemony, extending beyond economics and military power to include Chinese soft power (Le Pere 2021; Ye 2020; Rana and Ji, 2020).

Therefore, COVID-19 provided a significant opportunity for China to complete the 'Belt and Road 2.0' initiative, a renewal of the BRI, following the Second Belt and Road Forum for International Cooperation in 2019. As mentioned earlier, the impact of COVID-19 acted as a variable amplifying geopolitical and social conflicts between China as the donor country and the participating developing countries as recipients. However, China opposes the anti-globalization phenomenon that may emerge in the post-COVID-19 world order, and once economic recovery from COVID-19 becomes visible, it will fully reactivate the Belt and Road 2.0 as a development strategy within China and as a regional and global development strategy. At this time, by enshrining the BRI in the Constitution of the Communist Party of China, the Chinese government has officially designated the BRI as a national task that must be continuously implemented by evolving it to adapt to the changing external environment, even in the COVID-19 era. This signifies the official establishment of the BRI as President Xi Jinping's signature diplomatic and economic policy. [22]

In other words, as a critical juncture in history, the variable of COVID-19 provided the external environment for China to conceive the Belt and Road 2.0, reflect the changing relationship with the Global South, and improve BRI projects accordingly. The key aspects of the Belt and Road 2.0 can be summarized at the macro-strategic level and the micro-policy level. First, at the macro-strategic level, the Belt and Road 2.0 can be broadly summarized by two main strategies: debt relief for BRI participating countries and a shift from infrastructure construction to technological cooperation. The most needed mitigation measure for the impact of COVID-19 for BRI partner countries in the Global South is to share the overarching principle of debt forgiveness for the increasing debt of participating countries due to BRI infrastructure construction. Furthermore, due to COVID-19, large-scale infrastructure construction projects, which constituted the majority of existing BRI projects, are being transformed into more flexible and softer forms of cooperation, such as information technology, medical services, and education services, which are socially inclusive, in the post-COVID-19 era, due to the rigidity caused by trade controls, restrictions on the movement of Chinese construction companies and workers, and debt repayment issues. This principle is shared between China and participating countries (Ye 2020).

Meanwhile, at the micro-policy level, three representative strategic changes demonstrating China's Belt and Road 2.0 can be identified. First, one of the macro-strategies is to resolve the chronic issue of debt in participating countries of the BRI, while increasingly tending to secure China's national interests by linking resource diplomacy with debt forgiveness. Traditionally, China's investment in Africa focused on securing oil resources, but recently, the Chinese government has been concentrating on importing mineral resources such as cobalt, copper, and rare earth minerals from Africa. In January 2021, Chinese Foreign Minister Wang Yi visited the Democratic Republic of Congo, rich in cobalt, promised to forgive BRI-related debts, and announced an expansion of new infrastructure investments according to the BRI strategy. [23] The Democratic Republic of Congo is the world's largest producer of cobalt, a key material for batteries in electric vehicles, smartphones, and laptops, and China is the world's largest importer of cobalt. Therefore, China is adopting a strategy of promising debt forgiveness and providing additional BRI infrastructure investment to ensure a stable supply of cobalt from the Democratic Republic of Congo.

The second and third policy changes of the Belt and Road 2.0 are China's detailed strategies that actively reflect COVID-19: the Health Silk Road (HSR) and the Digital Silk Road (DSR) (Rana and Ji, 2020). First, the HSR was conceived in March 2020, as COVID-19 spread, for the Chinese government to support BRI participating countries affected by COVID-19 with vaccines and medical supplies for epidemic prevention. A representative example of HSR is the aggressive intervention in the Global South through China's health aid, termed 'mask diplomacy' and 'vaccine diplomacy.' According to the Chinese Ministry of Foreign Affairs, by the first half of 2021, vaccines were provided to 53 countries in the Global South, and 27 countries received vaccine exports. [24] Although mask and vaccine diplomacy were conducted in developing countries targeted for BRI support in Asia and Africa, when Italy, an EU member and BRI participating country, fell into distress due to COVID-19, China provided support to Italy, drawing criticism from the United States for acting to sow discord between the EU and the US. [25] As the Chinese government plans to re-expand the BRI through the Belt and Road 2.0, it strategically focuses its health and medical support on key countries that are geographically important for BRI operations and regions/countries where problems have arisen with existing BRI projects (e.g., Indonesia, Pakistan, Ethiopia, Philippines, Serbia, Sri Lanka, Turkey). As COVID-19 became a pandemic, epidemic prevention equipment was provided to Bangladesh, Pakistan, Sri Lanka, and Nepal, and Sri Lanka was promised US$500 million in concessional loans. In June 2020, President Xi Jinping hosted the Forum on China-Africa Cooperation (FOCAC) summit on COVID-19 prevention and control, promising debt and loan repayment waivers to African BRI participating countries.

Analysis suggests that China is linking complex strategies through its HSR initiative, going beyond merely dominating the health and medical equipment industry and vaccine supply chains in the Global South. The underlying purpose of the HSR strategy is to control the financial crises related to COVID-19 in existing BRI participating countries, expand BRI projects centered on HSR, pioneer new markets through these BRI projects, and seek a way out of the trade war with the United States. [26] By maintaining the BRI as a living infrastructure project through the provision of medical equipment and vaccine diplomacy, and by establishing a narrative and soft power as a global health leader to solidify China's position in the Global South and the international community, China aims to foster friendly relations, replacing the global governance system where the US-led liberal international order does not function properly (Gornikiewicz and Zelkowski, 2020). Furthermore, recently, there has been a competition between the US and China, dubbed 'vaccine diplomacy,' where both countries have declared their intention to provide vaccines to developing countries, highlighting their vaccine supply efforts and seeking to expand their influence in the international community by gaining an edge in humanitarian leadership. In early August 2021, after the US announced the donation of over 110 million doses of vaccines to more than 60 countries, China immediately announced the supply of 2 billion doses of vaccines worldwide, claiming to be the world's best by having supplied over 770 million doses to more than 100 countries to date. [27] In this context, President Xi Jinping pledged a US$100 million donation to COVAX at the opening speech of the first International Forum on COVID-19 Vaccine Cooperation, emphasizing China's leadership in vaccines.

Regarding the DSR, the final piece of the Belt and Road 2.0 puzzle, it can be assessed that COVID-19 has created a favorable external environment for China to expand its information and communication technology (ICT) related projects to developing countries through the BRI, compared to the HSR. Developing countries in the Global South will actively adopt and utilize ICT to prevent diseases like COVID-19, track the movements of infected individuals, and deliver public services non-face-to-face to COVID-19 victims, thereby advancing their domestic ICT capabilities. Therefore, the Chinese government has been actively accommodating the digital needs of participating countries by expanding DSR-related development projects since 2015, connecting them with the Global South through the BRI. This has led to the expansion of DSR from participating countries in Asia, Europe, and the Middle East to countries in Africa, Latin America, and the South Pacific, thereby extending the physical space of the BRI. While the US and Western European developed countries express skepticism about the reliability and security of Chinese ICT, from the perspective of Global South participating countries receiving DSR projects based on ICT from China, it is difficult to anticipate a critical stance towards the DSR projects of the BRI, which are urgently needed for economic development and digital transformation. [28] In this context, the DSR, one of the core pillars of the Belt and Road 2.0, is a strategy that digitally connects developing countries over long distances without requiring the physical mobilization of Chinese personnel for infrastructure construction. In the COVID-19 era, the DSR is becoming a crucial asset that can effectively demonstrate China's leadership.

If the DSR expands China-centric digital platforms at a relatively low cost, creating a vast cyberspace within the Global South based on advanced Chinese technologies such as 5G, it could form a competitive relationship with the cyberspace formed by democratic countries centered around the US, potentially leading to a decoupling between the US and China and, before long, a cyber Cold War (Keane et al. 2021; Schneider 2018). [29] In July 2015, China successfully launched the BeiDou navigation satellite, which is known to be more accurate than the Global Positioning System (GPS) operated by the US Department of Defense in some regions. In Asia, Pakistan, Laos, Brunei, and Thailand currently use BeiDou, and there is a growing trend in the Middle East and Africa to adopt BeiDou. At a lower level, the DSR aims to expand connectivity between regional businesses and consumers, and between businesses, on Chinese platforms. This means that China's DSR can provide not only hardware such as routers, smartphones, and PCs that enable e-commerce, ride-hailing, fintech, and edutech, but also software such as platforms and apps. Furthermore, if digital-based epidemic prevention technologies are provided in the process of supporting developing countries' epidemic prevention infrastructure due to COVID-19, this signifies a combined approach of DSR and HSR, and in reality, the two Silk Roads of the Belt and Road 2.0 are being integrated and provided to BRI participating countries. [30] In summary, China's provision of epidemic prevention technology, health infrastructure, and vaccines to Global South countries in need of epidemic prevention and vaccines due to COVID-19 is absolutely crucial for maintaining their regime and social order. Therefore, if China continues its aggressive development cooperation through debt relief, HSR, and DSR, as represented by the Belt and Road 2.0, it is in the process of establishing itself as a leader and hegemonic power for developing countries in the Global South, including BRI participating countries and African member states of FOCAC. While the impact of COVID-19 brought crises to the BRI and damaged China's national image, on the other hand, through internal improvements to the BRI, such as the introduction of the Green Silk Road (GSR) emphasizing climate and environment, and the Polar Silk Road (PSR) emphasizing polar development, the diversified Belt and Road 2.0, including HSR, DSR, GSR, and PSR, has become an opportunity to strengthen BRI cooperation and expand its scope. If China's epidemic prevention technology is used as a means of regime maintenance and social control in authoritarian developing countries, the Chinese model of authoritarianism is likely to expand among Global South countries. This, in turn, signifies the potential for the competition between democracy and authoritarian regimes to escalate in the US-China hegemonic competition, particularly in cyberspace, where a new Cold War of digital technology between the US and China is becoming increasingly likely. In conclusion, at the Global South regional level, Sinicization is operating as the standard for civilized society. At the global level, due to the stagnant global governance and the US-China strategic competition making it difficult to provide global public goods to respond to the pandemic, China is making multifaceted efforts to solidify its position as a leader and hegemonic power in the Global South by aggressively supporting Chinese epidemic prevention technology and expanding its influence in international organizations such as the UN (Hillman and Sacks 2021; Ye 2020; Jiuan and Xing 2014). This can be confirmed by the principles of 'Chinese international development' and 'active participation and intervention in multilateral international organizations (especially the UN),' emphasized in China's third white paper on foreign aid published in January 2021, which indicates the Chinese government's strategy to consolidate its global leadership and hegemonic position in the Global South through aggressive intervention post-COVID-19. [31]

IV. US Global South Strategy and its Political and Economic Implications

The US strategy for the Global South and its official development assistance (ODA) policies have been utilized as strategic assets to achieve the overarching norms of US foreign policy and national interest. Historically, development cooperation projects focused on diplomacy and security have been known as the core value and driving model of US ODA (Riddell 2007; Morss 2018; Darden 2020). From the Marshall Plan until the end of the Cold War, US foreign aid was primarily provided to allies and Third World countries in strategically critical geopolitical locations that could counter communist Second World countries. Therefore, the type of US foreign aid was classified as a diplomacy and security-focused model, along with the UK. The US Foreign Assistance Act of 1961 states that the primary goals of US aid are diplomacy, defense, and development. The very purpose of enacting the Foreign Assistance Act emphasized political beliefs, and the high consistency between the objectives of diplomacy and defense and the objectives of foreign aid has maintained the backbone of US Third World aid since its enactment. Furthermore, it is noteworthy that, as a significant characteristic of the US global South strategy, aid aimed at democratizing authoritarian developing countries, or 'democracy aid,' has been a representative aid policy of the US since the Kennedy administration, continuing through the Clinton and Obama administrations (Carothers 1999; Diamond 1999). While promoting democracy in developing countries of the Global South by supporting electoral systems, government institutions, bureaucracy, and civil society activation in partner countries through ODA, which could lead to positive outcomes in reforming local authoritarian regimes, it has also been criticized for unilaterally imposing US concepts and systems of democracy without recognizing local democratic institutions. In conclusion, from the 1960s onwards, the US, through the Foreign Assistance Act, focused on socializing Third World countries into the free democratic camp using ODA during the Cold War to exert influence globally and lead the global security order. In economic terms, ODA was also utilized to create markets accessible to US companies within recipient countries receiving US aid and to lay the groundwork for securing local resources. This US approach has maintained its foreign aid objectives, which are far removed from poverty alleviation and disease eradication, the primary goals of the OECD DAC, the club of developed donor countries.

Following the end of the Cold War, there was a significant shift in US foreign aid policy. The goal of development was no longer merely a strategic asset supporting diplomacy and security but was elevated to a position where it could discuss visions and values equivalent to diplomacy and security. In 2009, the Obama administration introduced the 'Quadrennial Diplomacy and Development Review (QDDR),' which involved a four-year plan to advance US national interests for global security, shared prosperity, and the universal values of human dignity and freedom. This plan was developed by the U.S. Department of State and the United States Agency for International Development (USAID), and US ODA policies for development assistance to the Global South were understood in accordance with this plan. [32] Following the introduction of the QDDR, the Obama administration recognized US ODA as a core component of its diplomatic strategy, emphasizing not only budget management but also improvements in the status and governance system of USAID. Additionally, in 2010, the Obama administration issued 'Presidential Policy Directive-6 (PPD-6),' elevating development issues to the level of national security agendas, equivalent to defense and diplomacy. As the world's largest donor country, US ODA policy was strategically formulated to ensure that development aligns with US national interests as a matter of national security. [33] Furthermore, the importance of private sector support for international development cooperation, in addition to official ODA from the US government, was emphasized (Bolling and Smith 2019). However, despite the Obama administration's emphasis on the importance of US foreign aid, the scale of US ODA remained at approximately 0.18% of the total government budget, still significantly short of the 0.7% of GNI recommended by the UN and adhered to by developed donor countries such as Sweden, Norway, the UK, and Germany.

Prior to COVID-19, US global South aid policies showed little evidence of specific strategic planning to counter China's expansionist policies in the Global South. The main policies of USAID under the Obama administration adopted an approach centered on issue-specific planning, known as 'initiatives,' leading to a strategy where US ODA was deployed on a case-by-case basis without an overarching development assistance strategy. [34] Initiatives such as 'Feed the Future,' which emphasizes solving global hunger and food security issues, and 'Power Africa,' which aims to expand private investment in electricity production and supply in Africa through US ODA, did not explicitly mention China's expansionary development aid investments in the Global South. However, they can be understood as reflecting the US's political intention to indirectly counter China's aggressive food aid and active intervention in Africa through FOCAC.

In its early stages, the Trump administration submitted a proposal to Congress to cut USAID's ODA budget by a significant 28.7%, signaling a return to 'America First Policy' and a decline in the US image as a global leader ([Figure 4]). According to the '2018-2022 ODA Strategic Plan' released by the US Department of State and USAID, the plan emphasizes renewing competitive advantage for sustained US economic growth and job creation, and protecting core US interests. This indicates that the Trump administration was pursuing a strategy of more strongly linking US ODA to national security and economic interests, while minimizing US involvement in global crises. Although there were concerns that the reduction in ODA by the Trump administration would revert to the Bush administration's approach, Oxfam's analysis suggests that while the Bush administration requested an 8% ODA reduction, the Trump administration requested a drastic 31% reduction when adjusted for inflation. [35] Many think tanks in Washington expressed concern that if the US neglects this area due to the misguided notion that international development is separate from core US economic, political, and security interests, it would cede leadership in this field to China, ultimately losing opportunities in virtually all areas of the global economy, including trade, investment, and finance. [36]

[Figure 4] US Government Budget Allocation Trends for Fiscal Year 2017 (%) [37]

However, the Trump administration did not remain entirely inactive in response to China's expansion of hegemony in the Global South. From an international development perspective, Trump's response to China's rise, particularly its engagement in the Global South centered around the BRI, can be broadly categorized into two main approaches. First, since 2017, through the Indo-Pacific Strategy (hereinafter referred to as the IPS), a cooperative platform with Japan, Australia, and India, the US has pursued a rule-based international order, institutionalizing regional norm cooperation to curb China's revisionist multilateralism (Jeong Gu-yeon et al. 2018; Song Seung-jong 2021). While many countries participating in the IPS welcome US engagement in the region, they are not always explicit in officially designating China as a primary target for containment. Cooperation among regional countries in non-traditional security areas such as development aid and economic cooperation would likely be actively pursued, and there would be no objection to institutionalizing balance and checks against China's growing regional influence through the IPS. However, military containment of China was pursued through security cooperation via the Quad (Quad), a sub-strategy of the IPS. India, however, clearly expressed its opposition to forming an anti-China united front. [38] Meanwhile, at the Quad summit in March 2021, referred to as the 'NATO of Asia,' member states expressed cooperation and engagement for regional humanitarian assistance and COVID-19 response. This indicates a significant shift in the role of the Quad since the outbreak of COVID-19 in response to China's development aid and BRI infrastructure provision.

Second, the 'Blue Dot Network (BDN)' plan, announced in November 2019 by the Trump administration in conjunction with Japan and Australia at the Indo-Pacific Business Forum held during the ASEAN Summit, is a multilateral infrastructure initiative aimed at expanding economic leadership in the Asia-Pacific region through joint infrastructure development with participating countries. It seeks to provide higher quality global infrastructure compared to China's BRI infrastructure projects to the region and the international community. [39] Similar to the 'Better Utilization of Investments Leading to Development Act (BUILD Act)' enacted in 2018 to promote private investment in developing countries, the 'high-quality' infrastructure projects promoted by BDN are planned with a focus on private capital for overseas investment, jointly undertaken by the US Overseas Private Investment Corporation (OPIC), the Japan Bank for International Cooperation, and the Australian Department of Foreign Affairs and Trade (DFAT). These projects aim to provide 'quality infrastructure' centered on infrastructure, energy, and digital initiatives, ensuring transparency, sustainability, and developmental impact. In light of skepticism regarding the quality control and auditing of China's BRI infrastructure projects according to global credit standards, the BDN can be assessed as an effort to restore a rule-based international order for infrastructure development.

While both policies of the Trump administration continue post-COVID-19, the impact of the COVID-19 shock has become a catalyst for significant changes in US global South policy only after the inauguration of the Biden administration. However, despite Biden's efforts to restore America's role as a global leader, it is generally assessed that the US remains passive in providing epidemic prevention-related medical equipment and vaccines to the Global South compared to China. [40] Following the outbreak of COVID-19, the Trump administration consistently pursued a self-centered policy, focusing strictly on vaccine development and supply within the US. While strongly condemning the origin of the pandemic in Wuhan and China's actions, it withdrew from the WHO, citing bias towards China, thereby refusing to exercise global leadership in responding to the global pandemic. In April 2020, the Trump administration actively utilized the 'Defense Production Act (DPA),' which grants the government direct control over industries during a national emergency, to prevent the transfer of epidemic prevention and vaccine-related medical equipment from the US to other countries. This resulted in the suspension of vaccine production by the Serum Institute of India, the world's largest vaccine manufacturer, which had promised to supply vaccines to developing countries in the Global South (approximately 95 countries). [41] Upon the inauguration of the Biden administration in January 2021, the declaration of 'America is Back' during the first overseas trip for the G7 summit signaled a rallying of democratic alliances. However, concrete leadership in immediately addressing the widespread COVID-19 crisis in the Global South has yet to be presented. The Biden administration's delayed response to the WHO's proposal to share US vaccine production intellectual property rights with developing countries, due to the imbalance in COVID-19 vaccine supply, led to international criticism, after which a limited waiver of intellectual property rights was eventually allowed. Furthermore, the Biden administration continues to experience conflicts and clashes with the WHO, opposing the WHO's request to postpone booster shots within the US to facilitate smoother vaccine provision to developing countries. [42]

In the era of COVID-19, the two main pillars of the Biden administration's foreign aid for the global South are the 'Quad Security Dialogue Platform' and the 'Summit for Democracy.' These two pillars can be assessed as the main outcomes of changes in U.S. foreign aid policy due to the shock of COVID-19. First, the Biden administration is pursuing a change through the Quad, simultaneously seeking to preemptively secure an advantage in humanitarian leadership in the U.S.-China strategic competition and to engage substantively with issues concerning developing countries in the Global South. At the Quad Summit in March 2021, the United States and its Indo-Pacific strategic partners pledged to supply one billion doses of COVID-19 vaccines across Asia by the end of 2022.[43]Through this summit, Quad member states agreed to cooperate on maritime security, cybersecurity, and economic security, which are directly linked to the national interests of the four democratic nations, to counter the rising China. They emphasized a rules-based order based on international law, oriented towards universal values, openness, and freedom, not only to participating countries in the region but also to China as a hypothetical partner. Although not explicitly stated in the summit declaration, humanitarian assistance and vaccine supply were actively included in the Quad security dialogue platform to contain China's growing influence in Asia and the Global South. In the same vein, it is understandable that Secretary of State Antony Blinken, during his video conference with Kenyan President Uhuru Kenyatta and Nigerian President Muhammadu Buhari in April 2021, warned about the risks of the BRI by highlighting the dangers of debt traps and conditional aid associated with Chinese assistance.[44]In April of the same year, the Australian government, a member of the Quad, canceled two BRI Memoranda of Understanding signed by the Victoria state government with China in 2018 and 2019, and also began reviewing the long-term lease agreement for the Port of Darwin signed with a Chinese company in 2015. Furthermore, a significant outcome of the Quad Summit that warrants attention is the pledge of substantial support for vaccine production in India, enabling it to become a forward base for the vaccine supply chain for other participating nations. Indian Prime Minister Modi responded by stating that the Quad has 'come of age and has now become an important pillar for regional stability.' The support within the Quad for India reflects not only India's status as the world's largest vaccine producer but also its geopolitical significance. As the only developing country capable of competing with China in the Global South, a member of BRICS, and a participant in the Quad, India's strategic value serves as a crucial asset for the United States in its strategic competition with China and its foreign aid to developing countries.

However, there are skeptical reactions regarding whether the United States can overcome the COVID-19 crisis in the Global South and restore its global leadership and a rules-based international order of liberal democracy through its Indo-Pacific strategy and the Quad.[45]Due to the deepening U.S.-China strategic competition, there is an increasing likelihood that the United States will find itself in a situation where it must cooperate with democratic countries in the Global South that have different political identities and goals than its own, in order to contain China. Furthermore, since the early stages of COVID-19, China has been implementing an aggressive vaccine supply strategy through bilateral channels along the BRI, reaping positive effects from its vaccine diplomacy. In contrast, the United States, unlike China, appears to be pursuing a more passive vaccine diplomacy by pledging vaccine supplies through (mini) multilateral forums like the Quad or G7, rather than directly providing vaccines itself. Therefore, for the United States to gain the support of the vast bloc of developing countries in the Global South and exert leadership in its strategic competition with China, new measures beyond the Quad are necessary to counter China's aggressive engagement in the Global South, which is promoting 'Belt and Road Initiative 2.0' post-COVID-19.

The second global engagement strategy of the United States in the Global South following the COVID-19 crisis is the infrastructure investment initiative known as 'Build Back Better World (B3W),' proposed at the G7 Summit held in Cornwall, UK, in June 2021. The Biden administration, judging that China's authoritarian revisionist international order is taking root in the Global South through China's large-scale infrastructure project, the BRI, attempted to convene a summit of 11 leading liberal democracies, including South Korea, India, Australia, and South Africa, in addition to the G7, to restore an international order based on liberal democracy. As Indian Prime Minister Modi was unable to attend the G7 meeting due to the emergence of COVID-19 variants, the 'D10' (10 democratic nations) supported the U.S.-led B3W initiative, which is analogous to the U.S. version of the BRI. The core of the B3W initiative is an ambitious plan for the U.S.-led G7 to support middle- and low-income developing countries in meeting their infrastructure needs, estimated at approximately $40 trillion by 2035. The G7 emphasizes B3W as a values-driven, high-standard, and transparent infrastructure partnership led by major democratic nations, with universal goals such as health security, digital technology, and gender equality. This positions B3W in direct contrast to the values and international order envisioned by the United States and Western Europe for the restoration of the liberal international order, and it counters China's debt-trap diplomacy, where developing countries participating in the BRI become dependent on Chinese loans.

However, since specific details on how B3W will be operated in the future have not yet been announced, at least three issues require consideration. The first issue is the funding mechanism for the large-scale capital required for B3W. Doubts are already being raised about the effectiveness of the ambitious large-scale infrastructure support funds, and there are calls for the establishment of a clear governance structure, including a promotion system and governing body for B3W, before funding can be secured.[46]The United States, leading B3W, is exploring ways to mobilize the capabilities of its development finance instruments, such as the U.S. International Development Finance Corporation (DFC) and USAID, and has stated its intention to actively cooperate with Congress to increase these instruments. However, the Biden administration is currently facing difficulties in securing funding for its domestic infrastructure investment plan. Even with the Republican Party opposing the Biden administration's $2.25 trillion domestic infrastructure plan, arguing it is too large and disagreeing with funding it through tax increases, there remains a significant congressional hurdle to securing the astronomical funds required for B3W to compete with China. However, it was shared that not only the United States but also each member country can secure funds through development aid agencies, bilateral partnerships, and multilateral development banks, and furthermore, plans to mobilize private funds for infrastructure investment in a transparent and secure manner were shared.

Second, there is a noticeable difference in the degree and manner in which G7 member states intend to counter China. The root cause of this divergence lies directly with the Debt-to-Service Ratio (DSR) of the BRI, and the differing responses of G7 member states to the use of Huawei's 5G mobile communication equipment clearly reveal the varying levels of their China containment strategies. At the G7 Summit, Germany and Italy expressed concerns that if the G7 begins containment of China through B3W, it could pose risks to their trade and investment with China, and that it could escalate into a 'new Cold War' similar to the U.S.-China trade war.[47]Germany effectively permitted the use of Huawei's 5G equipment in 2020 after China threatened to retaliate against German automakers like Volkswagen if they did not use Huawei's 5G mobile communication equipment in 2019. Italy was the first G7 country to participate in a BRI project in 2019 and has conditionally permitted Huawei's 5G mobile communication equipment supply, despite concerns from the United States and others. Therefore, although B3W was officially launched to support developing countries in the Global South in overcoming COVID-19 and to provide exemplary infrastructure projects, in reality, G7 member states are expected to determine their level of participation in B3W based on their closely intertwined political and economic relationships with China. Consequently, the success of the B3W infrastructure project can be assessed as dependent on the unity within the G7.

Third, it remains uncertain whether developing countries in the Global South that have already participated in the BRI will respond positively to B3W support. Currently, it is estimated that over 100 developing countries have agreed to cooperate with China on BRI projects, and as of the first half of 2020, the number of projects linked to the BRI was reported to be approximately 2,600, with a budget scale of as much as $3.7 trillion (approximately 4,129.5 trillion won).[48]Some predict that while the BRI's know-how, accumulated since 2013, may have a short-term advantage, B3W, which is oriented towards a rules-based international order and operates on the principles of the rule of law and good governance in the medium to long term, will eventually dominate infrastructure projects in the Global South.[49]However, analysis suggests that for developing countries urgently needing infrastructure development, the BRI, which invests flexibly in projects like thermal power plants and dams, may be more attractive than B3W, which adheres to strict norms for 'environmentally and socially sustainable development.' A March report by the Council on Foreign Relations (CFR) noted that many Belt and Road participating countries praise the speed of China's project execution, from planning to construction, emphasizing China's willingness to build what participating countries desire and the convenience of negotiating with a single group comprising construction and finance professionals and government officials (Hillman and Sacks 2021). In reality, the fragmented nature of various infrastructure construction programs in the United States and the emphasis on environmental and human rights issues by Western Europe may be far less attractive to developing countries in the Global South than China's integrated package of finance and new technologies (Brautigam 2009).

In summary, the Biden administration, in response to the global health crisis in the Global South caused by the COVID-19 shock, is likely to focus on two implementation mechanisms: vaccine diplomacy through the Quad and large-scale infrastructure investment through B3W. Ultimately, the strategic competition between the U.S. and China, and the tension between China's revisionist multilateralism and the U.S.'s liberal and rules-based international order, will converge in the Global South, manifesting the civilizational standards championed by the two great powers through the BRI and B3W. Due to China's aggressive strategy of expanding its influence in the Global South through vaccine diplomacy and the BRI, the U.S.'s strategy for the Global South is being driven by a reactive approach through the G7's B3W. Therefore, the extent to which the BRI and B3W will develop as adversarial competitors in the post-COVID-19 era is a matter of significant interest.

Finally, a strategic card the United States can deploy in its competition with China in the Global South following the COVID-19 pandemic is the strategic utilization of India, one of the key countries within the region. The Biden administration, seeking to contain China's rise and restore the liberal international order, is strategizing to leverage its alliance with India in the Global South as a crucial asset in its diplomacy towards China, in addition to close cooperation with the EU, which includes Germany, France, and Italy among its member states. India can be considered the most suitable partner in the Global South for the United States and other developed nations in the G7 and EU, aligning with their goals of upholding a rules-based international order and liberal democracy. Furthermore, as a key member of BRICS, India maintains cooperative relationships with China on numerous infrastructure construction projects. This creates an advantage for Northern democratic countries, allowing them to gain a strategic edge if regional competition and checks and balances emerge between China and India within the Global South. For these reasons, India is virtually the only developing country for which the United States has officially formalized support for vaccine provision and economic development thus far.

V. Intensification of China-India Conflict in the Global South: From Coexistence to Hegemonic Competition

To analyze the hegemonic competition in the Global South during the COVID-19 pandemic, in addition to the relationship between U.S.-China strategic competition and the COVID-19 crisis, and the competition and conflict between the BRI and B3W that will intensify in the post-COVID-19 era, two additional variables need to be discussed. The first is the active involvement of the EU in the anti-China front, and the second is the rise of India as a counterweight to China. These two variables converge in the expansion of India's regional hegemony in the Global South, as the EU is making substantial investments and providing support to India to counter China's rise. The new phenomenon arising from the COVID-19 variable is likely the unfolding of China-India competition and conflict within the Global South, driven by India's rapid ascent and substantial support centered around the G7.

Above all, although India does not hold a completely aligned position with the United States and Western European developed nations on all issues of multilateral cooperation based on the liberal international order, India is the only strategic partner in the Global South with whom the United States and Western Europe share common universal values and can jointly pursue a rules-based international order of liberal democracy in various international forums.[50]India was one of the invited democratic nations (D11) to the 2021 G7 Summit in the UK. Although it unfortunately could not attend the meeting, India's leadership in representing democracy in the Global South is expected to be further emphasized in the future. Furthermore, as the only Global South country participating in the Quad, India is a critically important partner in the U.S. Indo-Pacific strategy. Since August 2021, India has been serving as the President of the United Nations Security Council (UNSC), creating a situation where close cooperation with India, as a representative of the Global South, is necessary for the United States and other Western developed nations to consolidate and expand the rules-based international order in multilateral diplomacy.

COVID-19 has provided an opportunity and justification for developed countries in the Northern Hemisphere to expand aid to India and enhance its role. The EU, more so than the United States, has shown a more proactive stance in aiding and investing in India, necessitating a review of future EU engagement. Initially, when India faced a severe COVID-19 crisis due to a virus variant in April 2021, White House National Security Advisor Jake Sullivan reaffirmed the solidarity with India, and President Biden also emphasized this, clearly stating commitments for COVID-19 related assistance. The United States identified specific raw materials urgently needed for the production of 'Covishield,' the AstraZeneca vaccine produced in India, and approved their immediate availability to India. This reversed the strained relationship under the Trump administration, which had prohibited the export of vaccine raw materials to India under the Defense Production Act, restoring a relationship of solidarity under the Biden administration. Additionally, the United States pledged all possible support to India, excluding finished vaccine products, including therapeutics, rapid diagnostic kits, ventilators, and personal protective equipment for treating COVID-19 patients and protecting medical personnel, as well as funding from the DFC to enable the Indian vaccine manufacturer BioE to produce one billion doses by the end of 2022.[51]

Meanwhile, the EU's support for and promotion of cooperation with India is more proactive than that of the United States, with a clearer strategic intent to counter China's BRI. In May 2021, the EU planned the 'EU-India Connectivity Partnership (EICP)' and, at the 15th India-EU Summit, India and the EU agreed on a plan to enhance connectivity through a transparent, inclusive, sustainable, comprehensive, and rule-based approach.[52]By emphasizing a rule-based approach, the EICP highlights its differentiation from China's BRI initiative by embracing universal international standards, thereby countering China's revisionist multilateralism. Through the EICP, the EU and India plan for the EU to provide energy and transportation network construction, 5G communication network development, sustainable financial support, and rule of law building support to India in third countries.[53]This connectivity partnership is similar to one the EU signed with Japan in 2018, suggesting that the EU-Japan-India connectivity strategy can be understood as part of the EU's effort to secure networking power, akin to the U.S. Quad. Furthermore, the EU has agreed with Indian Prime Minister Modi to renegotiate the Free Trade Agreement (FTA) with India, which had been stalled. The conclusion of an FTA between the EU, a major economic entity, and India is interpreted as having the objective of countering China.[54]The UK also plans to enter into trade negotiations with India in the second half of 2021.

The EU's intention to counter China is further clarified by the 'Global Gateway (GG)' initiative announced in September 2021.[55]The EU plans to launch GG, a new infrastructure connectivity initiative for the Indo-Pacific region, to counter China's BRI. This initiative aims to check the expansion of Chinese influence and strengthen the EU's role as a global player. European Commission President Ursula von der Leyen emphasized that GG will adopt a values-based approach, providing transparency and good governance to partner countries, promoting connectivity rather than dependency, and highlighting the differentiation between GG and the BRI, which is criticized for trapping developing countries in debt. In this regard, the EU plans to pursue a ban on the sale of products manufactured through forced labor, which also targets allegations of forced labor in China's Xinjiang region and is not unrelated to the EU's decision in March 2021 to impose entry bans on four Chinese officials implicated in human rights abuses in the Xinjiang region.[56]

Ultimately, the support from the United States and the EU for India is likely aimed at leveraging the existing conflict between India and China and re-evaluating India's role in the context of COVID-19 to secure pro-U.S. or pro-EU liberal democratic partners in the Global South capable of competing with China. Indeed, since the launch of BRICS in 2013, China and India, as core members, were two Asian powers that achieved economic growth while possessing vast populations, fostering solidarity and cooperation through South-South cooperation. However, India is a liberal democratic system, whereas China is a socialist and authoritarian state. Consequently, China and India have maintained a relationship of 'cold peace,' characterized by coexistence amidst tension (Smith 2014). Moreover, within BRICS, competitive relations between China and India were detected concerning issues such as hosting the secretariat and selecting infrastructure projects (Cynthia et al. 2018; Kim Tae-gyun 2018; Morozkina 2020). This fragile peace was shattered by border disputes between China and India, and the aggressive BRI initiated by China led to a failure in building mutual trust between the two Global South powers. Most recently, in June 2020, a border clash resulted in the deaths of 20 Indian soldiers and 4 Chinese People's Liberation Army personnel, with no concrete resolution discussions following. [57]Furthermore, China's pursuit of the China-Pakistan Economic Corridor (CPEC) as a BRI project was not welcomed by India, which has a historical conflict with Pakistan, leading to distrust of China's intentions in pursuing such projects (Sachdeva 2018). When India faced a severe COVID-19 crisis with a variant outbreak in 2021, China quickly offered to provide medical supplies and vaccines, while the United States was slow to respond. However, India did not readily accept China's offer.[58]Meanwhile, India expressed dissatisfaction with the U.S.'s delayed response to the COVID-19 variant crisis, particularly regarding the U.S. restriction on the export of materials necessary for vaccine production under the Defense Production Act (DPA). China exploited this situation by promising aid to India and criticizing the United States.[59]India perceived China's criticism as an intentional attempt to sow discord between the U.S. and India, indicating that the China-India border conflict is a major reason for the failure to build trust between the two Asian powers.[60]

From India's perspective, it has made strategic choices to ensure stable checks and competition while cooperating with China. During the COVID-19 pandemic, India is leveraging the health crisis and its vaccine production capacity to strengthen its position. Although India maintains partnerships with both sides in the U.S.-China strategic competition, its recent participation in the Quad and its invitation as a democratic country to the G7 suggest a leaning towards the U.S.-centered realignment of the international political and economic order. Particularly, with the advent of the COVID-19 crisis, China has gained control over vaccine supply and related global supply chains in the Global South. This has put pressure on India, while also necessitating checks on China's unilateral expansion of hegemony within the Global South. Nevertheless, as China is a traditional cooperation partner in South-South cooperation, India finds it difficult to antagonize China. Therefore, India fundamentally opposes the exclusivity of the Indo-Pacific strategy targeting only China and pursues inclusive, development-oriented regional cooperation. However, it also pursues various connectivity partnerships with key actors in the liberal democratic camp, including the EU, the United States, Japan, and Australia, representing the plight of recipient countries facing difficulties such as debt issues with China's aggressive BRI (Sachdeva 2018). Notably, after evaluating itself as a victim of the 'Bangladesh-China-India-Myanmar (BCIM) Economic Corridor' project, initiated as a BRI project in 2015, India became cautious about participating in BRI projects and subsequently decided not to attend the 'Belt and Road Forum.' Following this, China removed the BCIM from its list of BRI projects.[61]This mutual check between India and China will likely provide India with the ambition to solidify its position as a leader in the Global South or at least establish an independent force capable of competing with China. Concurrently, India will pursue multi-connectivity, adhering to its fundamental diplomatic principle of engaging with all great powers based on specific issues and agendas (Sigdel 2020; Bhardwaj 2022).

In the short term, India's vaccine diplomacy is likely to clash with China's aggressive vaccine diplomacy due to the global COVID-19 crisis. However, in the medium to long term, a scenario is possible where India's vaccine production, linked to multilateral platforms such as COVAX and B3W, could lead to the isolation of China within the Global South through India's vaccine diplomacy.[62]As of March 2021, India is the world's vaccine factory, producing 60% of the global COVID-19 vaccines, and is known as a powerhouse in the pharmaceutical industry worldwide, including among developed countries. If the United States had lifted the DPA restrictions in advance and provided vaccine production components to India, vaccine supply would have been much smoother, and India's vaccines would have negatively impacted China's vaccine diplomacy. While China has declared its vaccine, 'CoronaVac,' as a global public good and is extensively supplying it to Asia and Africa to dominate the vaccine supply chain for developing countries globally, India, despite producing large quantities of vaccines, is limited to its role as a major producer of AstraZeneca and regional vaccine supply, as these are not its own vaccines.[63]To support India's vaccine supply and global supply chain management, the Biden administration, similar to AstraZeneca, announced plans to produce U.S. vaccines in India and pledged to fund Indian pharmaceutical companies producing the Novavax vaccine, thereby enhancing India's vaccine capacity and curbing China's vaccine diplomacy. In conclusion, for the time being, India and China will focus on vaccine diplomacy, and the competition for hegemony and leadership in the Global South through this vaccine diplomacy will be a key point to watch. In areas of the Global South where the United States is not actively involved, India will maintain close cooperative relationships and connectivity with the U.S. and the EU to collectively respond to China's BRI and vaccine diplomacy.[64]

VI. Conclusion: The COVID-19 Variable and the India Variable

China likely devised a plan to secure stable leadership in the Global South through aggressive vaccine diplomacy, using COVID-19 as an opportunity, and subsequently universalize a new civilizational standard based on Chinese revisionism in the international political and economic order on the global stage. Conversely, the United States is striving to restore the liberal international order and consolidate the rules-based international order through strategies such as conceptualizing B3W with the G7 to address the inherent problems of corruption and lack of transparency in China's BRI, and contributing to resolving regional vaccine issues through the Quad. The reason the United States must become more actively involved in the poverty and health crises of the Global South is that if the South is not managed directly or through alliances by the United States, it will become a black hole that continuously poses problems to the U.S. civilizational standard and international political order. The health crisis in the Global South is not merely a problem to be resolved by vaccine supply; it is interconnected with other crises such as food insecurity and climate change. Furthermore, it is linked to multilateral political issues concerning which country, the United States or China, the Global South nations will support in international organizations like the UN. If economic recovery post-COVID-19 proceeds in a K-shaped model, the developed countries of the Northern Hemisphere, centered around the United States, will ultimately have to accommodate the economic inequality issues arising in the Global South. If China takes the lead in addressing inequality issues in the Global South, the center of gravity in the U.S.-China strategic competition is highly likely to shift towards China.

The COVID-19 variable has acted as a catalyst, accelerating the pre-COVID-19 U.S.-China strategic competition, and this exhibits a distinctly path-dependent characteristic. In China's case, issues such as corruption and lack of transparency in the pre-COVID-19 BRI were raised, and improvement measures were already adopted by President Xi Jinping in 2019. The BRI improvement measures were transitioned into 'Belt and Road Initiative 2.0' by introducing new elements like HSR (High-Speed Rail) and DSR (Digital Silk Road) in the context of the pandemic, but this represents an adjustment of existing policies to changing environmental factors rather than a new policy change. In the case of the United States, although new changes were sought through the COVID-19 variable to invest large-scale infrastructure resources in developing countries, the decision for large-scale infrastructure investment through the B3W initiative can be considered catalytic, as the U.S. was already pursuing support for the Global South, such as through the BDN (Build Digital Networks), prior to the COVID-19 shock. Therefore, the U.S.-China strategic competition, influenced by the COVID-19 variable, has entered a more intense phase, with vaccine diplomacy and infrastructure support for developing countries being added as the existing strategies are modified or supplemented to address the health crisis.

While it is difficult to identify phenomena that have emerged entirely anew due to the COVID-19 variable, India's rise can be cited as a new change brought about by COVID-19. Although the COVID-19 variable acted as a catalyst for India's rise, as it did for other phenomena, the emergence of India as a new leader of the Global South and a strategic partner of the United States and the EU is significant because India is forging new paths (path-shaping), breaking away from path dependency. India's identity is pluralistic. As a liberal democratic system, its identity aligns precisely with the liberal international order pursued by the United States and developed countries in the Global North, which is why the G7 invited India as a partner in democratic solidarity to its summit, and why the US, Japan, and Australia included India in their Indo-Pacific strategy as a member of the Quad. This ultimately signifies India's shared objective with democratic nations to counter China's aggressive hegemonic expansion. Meanwhile, as a member of BRICS, which leads South-South cooperation—a traditional legacy of the Global South—India shares the spirit of the 1955 Bandung Conference with China and maintains a cooperative relationship. Furthermore, as a sovereign state, India maintains a conflictual relationship with China over border issues and is prepared to cooperate with the US and China for vaccine production and supply to address the COVID-19 damage to the Indian population. Lastly, as one of the leading countries managing the region of the Global South, India plans to pursue vaccine diplomacy for developing countries in the Global South by engaging in vaccine production and supply chains, which is highly likely to lead to clashes and conflicts with China's assertive vaccine diplomacy.

Therefore, the new independent variables to focus on in the post-COVID-19 era are India's rise and its pluralistic identity. For the Biden administration to successfully pursue Strategic Patience 2.0 against President Xi Jinping's revisionist multilateralism in the post-COVID-19 era, it will require efforts to ensure that India, a key country in the Global South, supports the US liberal international order and vaccine diplomacy, competes with China within the Global South, and that the Global South becomes divided or actively integrated into the US-led rules-based international order. In other words, the strategy is to differentiate the US-China strategic competition, so that China competes for hegemony with India within the Global South and with the US at the global level. For this scenario to be possible, India must resolve the issue of its identity becoming diversified due to its connections with various partner countries on a case-by-case basis. As the shock and crisis of COVID-19 stabilize to some extent with vaccine distribution, India's role in the K-shaped economic recovery will emerge as a crucial variable for both the US and China. Thus, in the post-COVID-19 era, India's choices will operate as a significant independent variable.■

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[46] The Economist. 2021. “The G7 sketches a development-finance initiative to counter China’s.” June 12. https://www.economist.com/international/2021/06/12/the-g7-sketches-a-development-finance-initiative-to-counter-chinas (Accessed August 25, 2021).

[47] Sanger, David E. and Mark Landler. 2021. “Biden Tries to Rally G7 Nations to Counter China’s Influence.” The New York Times. June 12. https://www.nytimes.com/2021/06/12/world/europe/biden-china-g7.html (Accessed September 1, 2021).

[48] Refinitiv. “BRI Connect: An Initiative In Numbers.“ https://www.refinitiv.com/content/dam/marketing/en_us/documents/reports/belt-and-road-initiative-in-numbers-issue-5.pdf (Accessed September 1, 2021).

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[55] Lau, Stuart and Hanne Cokelare. 2021. “EU launches ‘Global Gateway’ to counter China’s Belt and Road.” Politico. September 15. https://www.politico.eu/article/eu-launches-global-gateway-to-counter-chinas-belt-and-road/ (accessed September 22, 2021).

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[58] Gan, Nectar and Jessie Yeung. 2021. “China offered Covid aid to India while US dragged its feet, but Delhi isn’t that keen.” CNN. April 28. https://edition.cnn.com/2021/04/28/china/china-india-covid-relief-mic-intl-hnk/index.html (accessed September 5, 2021).

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[62] Crystal, Caroline. 2021. “The G7‘s B3W Infrastucture Plan Can‘t Compete with China. That‘s Not the Point.” Council on Foreign Relations. August 10. https://www.cfr.org/blog/g7s-b3w-infrastructure-plan-cant-compete-china-thats-not-point?utm_medium=social_share&utm_source=fb&fbclid=IwAR1ijd8Af9QqdQhwHGajSC2XVafD1AHZF5T_f0kUrNHEmhcT7jjqUmuXvh4 (accessed August 21, 2021).

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■ Author: Kim Taegyun_Professor, Graduate School of International Studies, Seoul National University. He holds a Ph.D. from the University of Oxford and the Johns Hopkins School of Advanced International Studies (SAIS). His main research areas include international development studies, peace studies, international political sociology, and global governance. His major works and edited volumes include 《The Korean State and Social Policy: How South Korea Lifted Itself from Poverty and Dictatorship to Affluence and Democracy》 (Oxford University Press, 2011), 《Antagonistic Coexistence: Asian Reproduction of Global Accountability》 (Seoul National University Press, 2018), and 《Critical Korean Development Studies: Developmental Reflections on International Development》 (Palgrave Macmillan, 2019).

■ Managed and Edited by: Yoon Ha-eun_EAI Researcher

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