Biden Admin Defends Ford’s Work on China’s ‘Belt & Road Initiative’

State Department says project will bring Beijing in line with ESG guidelines

(Lintao Zhang/Getty Images)
May 26, 2023

The Biden administration is defending Ford Motor Company’s work on a flagship project of China’s controversial Belt and Road Initiative, saying the American company’s involvement will help bring Beijing more in line with progressive investment standards.

Ford boasts about its partnership with a Chinese mining company on "one of the flagship projects under the Belt and Road Initiative," which U.S. officials have called a military and economic security threat. But in a letter to Sen. Marco Rubio (R., Fla.), State Department Assistant Secretary of Legislative Affairs Naz Durakoglu indicated that the Biden administration’s main concern with China’s Belt and Road Initiative is that the companies involved have "poor labor and ESG records." ESG is an acronym for a progressive-backed investment strategy that stands for "environmental, social, and corporate governance."

The letter, which was obtained by the Washington Free Beacon, suggests the Biden administration is no longer directly opposing the Belt and Road Initiative, and is now focused on improving the labor conditions of Beijing’s operation. The news comes over a month after the U.S. ambassador to Indonesia, Sung Kim, praised Ford’s partnership with China’s Zhejiang Huayou Cobalt Company on a nickel production facility in Indonesia. Rubio asked the State Department to investigate Kim’s comments in a letter earlier this month, to which Durakoglu has now replied.

Durakoglu said the Biden administration was concerned that the People’s Republic of China was using the Belt and Road Initiative to "advance its geopolitical strategy via PRC-controlled businesses with poor labor and ESG records."

"[China]-controlled mining companies in Indonesia that are not affiliated with U.S. companies generally maintain poor labor and environmental standards but currently dominate the Indonesian nickel sector," wrote Durakoglu. "Indonesian officials, including President Widodo, are focused on attracting additional countries’ firms to invest in the sector to raise labor and ESG standards."

Durakoglu added that the State Department "welcome[s] Indonesia’s aspirations to improve labor and ESG practices in this critical sector."

China’s "Belt and Road Initiative" is a massive, multi-continent infrastructure project that U.S. officials have described as a global security threat. The United States government has urged other countries not to participate in the initiative.

In 2021, President Joe Biden launched the "Build Back Better World" project, also known as "B3W," which was intended to counter the Belt and Road Initiative. But since then, there has been little public reporting on the American program’s progress.

The State Department did not respond to a request for comment.