America's Infrastructure Threat

Friends, this past week’s crippling storms and blackouts were a reminder that U.S. infrastructure has been dangerously neglected. Below, I make the case for why a domestic infrastructure package is not only economically wise, but also vital to U.S. national security, given climate change, innovation, and the rise of China. Making these critical investments at home would also position the United States to compete more effectively with China’s Digital Silk Road abroad. More on that below.

Best,

Jon


America’s Broken Infrastructure is a National Security Threat

The warning signs are everywhere. In Texas, a winter storm leaves millions of households without power. In Wisconsin, farmers are struggling to safely use modern equipment on roads that were built over 50 years ago. In Arizona, a century-old bridge partially collapsed last summer after a train derailed. In Florida, old pipes are leaking millions of gallons of sewage. America, the city on a hill, is crumbling.

After years of promises and inaction, revitalizing U.S. infrastructure needs to be treated as a national security priority rather than a punchline. Few ideas have as much bipartisan appeal and economic potential. Increasing public spending on infrastructure to levels similar to the mid-twentieth century would create more than 3 million jobs by 2029 and boost productivity. The U.S. economy would grow by $2.70 for every dollar spent.

But above and beyond the economic stakes, fixing U.S. infrastructure is a national security imperative. The strategic importance of infrastructure is not new, but it has grown in recent years due to climate change, innovation, and China’s rise. At stake is the United States’ military readiness, national resiliency, and global competitiveness.

During the Cold War, President Dwight Eisenhower understood the link between infrastructure and military readiness. As he argued in his 1955 State of the Union Address, “A modern, efficient highway system is essential to meet the needs of our growing population, our expanding economy, and our national security.” Eisenhower worked with Congress to create the National Highway System, which enhanced the United States’ ability to move troops and evacuate large cities.

Decades later, these capabilities were still on display. “The capacity of the U.S. highway system to support the mobilization of troops and to move equipment and forces to U.S. ports of embarkation was key to successful deployment,” Lieutenant General Kenneth R. Wykle explained to Congress after the First Gulf War. The problem, however, is that the National Highway System was designed to last until the 1970s. Years of underfunding has left a backlog of work for U.S. highways and bridges that exceeds $830 billion.

Infrastructure is also essential for resilience, the ability to recover from adversity. Last year, the United States experienced 22 weather and climate disasters with losses exceeding $1 billion each, a new record. Combined costs reached $95 billion. No person or place is immune to these risks, which aging infrastructure magnifies. As a National Academy study explains, “If a community has weakened infrastructure, like a human body with a compromised immune system, it will not withstand trauma as well as one in good health.”

Climate change is increasing these risks. Much of today’s infrastructure was built for a world that was cooler and less extreme, and it is now aging more quickly. Increased temperatures, precipitation, and storm severity that accompany climate change all degrade roads, bridges, and railways. Rebuilding infrastructure provides an opportunity to incorporate disaster resilience. It also provides an opportunity to increase energy efficiency and build a greener economy.

Resiliency extends beyond natural disasters. As the U.S. government considers how to make supply chains for critical goods more resilient, investments in infrastructure will be essential for reshoring production. New domestic production will create new patterns for moving goods that infrastructure will need to serve. Investing in infrastructure would also incentivize for companies to set up shop in the United States.

The United States is competing for much more than the attention of global companies. Infrastructure will influence whether the United States trains and attracts the brightest minds, whether it remains a leading hub for innovation, and whether U.S. workers and companies have the solid foundation required to export their goods and services to foreign markets. Right now, the sorry state of U.S. infrastructure is a drag on all these prospects.

Digital infrastructure has become even more essential to daily life, a trend accelerated by the Covid-19 pandemic. However, over 40 million Americans still don’t have access to broadband. Investments in infrastructure are needed to close that divide and give U.S. communities access to the educational, health, and business opportunities that digital connectivity provides. Done right, investments in digital infrastructure could also position the United States to export more of these solutions, from Open RAN networks to smart city systems.

China’s rise raises the stakes further. The United States is entering what could be a decades-long competition in which economic and technological power will matter just as much, if not more, than military might. Starting this race with decaying infrastructure is like lining up for a marathon with a broken ankle. Beijing understands the nature of this contest. Chinese leader Xi Jinping is championing “new infrastructure,” calling for major investments in 5G networks, data centers, industrial internet capacity, satellite services, and other digital infrastructure.

With its Belt and Road Initiative, China has even rolled out a bigger infrastructure package beyond its borders than the United States has been able to muster at home. Washington should not attempt to match Beijing’s infrastructure activities, which keep bloated state-owned enterprises afloat, stoke corruption, and can destroy more value than they create. But the United States must rise to the challenge by making strategic investments in its own future at home and playing to its own strengths abroad.

There are two paths ahead. The path not taken for ages—revitalizing U.S. infrastructure—will require courage and compromise. But it leads toward renewal, prosperity, and security. The current path—neglecting U.S. infrastructure—is easy and dangerous. It leads toward unpreparedness, fragility, and decline. The choice is simple: the city on the hill can shine again, or the world can watch as its lights go out.


Competing with China’s Digital Silk Road

The Biden administration needs a strategy for competing with China’s Digital Silk Road that begins at home, I argue in this piece for CSIS’s Global Forecast 2021 series. There are several immediate opportunities: leveraging a U.S. domestic infrastructure package to scale strategic technologies; improving interagency coordination of U.S. economic tools; bringing European partners into joint efforts begun by the United States, Australia, and Japan; and showcasing U.S. cities as part of an allied approach to smart cities. All of these efforts can feed into, and benefit from, broader allied cooperation on technology. But the new administration should move to get some early points on the board, meaning actual projects.


What They’re Saying: The Emperor’s New Road

“Jonathan Hillman has traveled to many of the places where big projects are taking place and the stories he tells are typical of crime novels, with a cast of characters that any writer would envy. ” - Francis Ghilès, esglobal (in Spanish)

Buy the Book

“The strength of his book lies in the fact that Hillman looks at the projects of the “New Silk Road” in their historical and geographical context…Hillman fills another gap: in many analyzes of the Belt and Road Initiative, the countries in which the infrastructure is being built appear only as passive recipients of money. The author brings them back into the picture as actors.” - Friederike Böge, Frankfurter Allgemeine (in German)


Picture and 100 Words: Riding Kenya’s SGR

The stations on each end of Kenya’s Standard Gauge Railway (SGR), which stretches from Mombasa to Nairobi, feel like airports. The hulking buildings sit outside the city centers, passengers endure security screenings, and railway staff are dressed like flight attendants. Kenya borrowed more than $3 billion from China to build the line, and to boost traffic, authorities required that cargo imported through the Port of Mombasa use the railway to reach Nairobi and other destinations inland. Last week, a court overturned that rule, helping local truckers and consumers while casting further doubt over the SGR’s commercial prospects.


Global Implications of China's BRI

On January 28, I joined Min Ye of Boston University to discuss our new books on China’s Belt and Road Initiative with Glenn Tiffert of the Hoover Institution and Michael Bennon of the Center on Democracy, Development and the Rule of Law at Stanford University. You can watch the conversation here.


What I’m Reading

Who Lost Lucent? The Decline of America’s Telecom Equipment Industry by Robert D. Atkinson - As late as 1997 the U.S. produced one-third of all telecom equip­ment in the world, and Lucent towered over the competition. But the United States largely left the sector to market forces, while China viewed it as strategic. Lucent’s demise holds urgent lessons for U.S. policy, argues Atkinson. “The days when America was so strong economically and tech­nologically that it could afford to lose advanced technology industries are long gone.”

A World Divided: The Conflict with Chinese Techno-Nationalism Isn’t Coming — It’s Already Here by James Mulvenon - “What’s good for Silicon Valley or Wall Street’s quarterly numbers is no longer necessarily what is good for America’s long-term technological or industrial interests,” a leading expert on Chinese military and cyber capabilities writes in this piece, which concludes with recommendations for offense and defense in the tech competition with China.

Where Is the Africa-China Relationship Headed in 2021? by Hannah Ryder - The author, CEO of an international development consultancy, sees relations between Africa and China improving during the year ahead. “If African nations are able to encourage China’s lending institutions to maintain the supply of loans in 2021 amid the noise of an alleged ‘debt crisis,’ that will lead to a strengthened relationship,” she writes. “Despite its challenges and weaknesses in delivering more for African people, right now, it simply beats the rest.”

Asymmetric Competition: A Strategy for China & Technology by Eric Schmidt, Jared Cohen, Liz Economy, et al. - This paper puts forward criteria for identifying which technologies are the most critical and offers recommendations for sustaining U.S. technological advantages. It’s grounded in the observation that several asymmetries favor China (blurring of public and private sectors, large population, abundant state capital, and data-generating surveillance apparatus).


Thank You for Reading

This newsletter is a work in progress, and it will only get better with your feedback, so let me know what you think. You can also find me on Twitter: @HillmanJE. And if you’ve enjoyed reading, please spread the word.