Infrastructure investment is a global phenomenon with long-term implications for the regions and countries involved. As illustrated by two announcements last week, the United States and China have very different visions.

First, Stephen Schwarzman, CEO of The Blackstone Group, announced during President Trump’s visit to Riyadh that the Saudi Arabian Public Investment Fund (PIF) had committed $20 billion for a to-be-created infrastructure investment fund. Schwarzman, who also chairs the Strategic and Policy Forum, a group of business advisors to President Trump, said that Blackstone hopes to raise an additional $20 billion from other clients to invest in roads, bridges, airports, ports, rail and other critical infrastructure projects, principally in the United States. The Fund’s goal is to leverage the equity raised to purchase roughly $100 billion in projects and establish a leadership position.

Blackstone’s stock increased significantly with the announcement. Interestingly, it was reported that the White House was not involved in the PIF commitment. Blackstone appears to be convinced that attractive opportunities will emerge whether or not President Trump can designate $200 billion in public funds, enact tax credits or streamline the permitting process for this country’s aging infrastructure. Blackstone is undoubtedly aware that Trump’s advisors favor a public-private partnership approach to development that is more common in Australia, the United Kingdom and Canada. According to Tom Carr, an expert in infrastructure at Preqin, the Fund is more than double the size of any previous investment vehicle and is part of an unprecedented worldwide boom in fundraising for infrastructure projects. Other infrastructure funds have been formed in 2016 and 2017 by Macquarie, ArcLight Capital Partners, Brookfield Asset Management and Global Infrastructure Partners.

Second, Chinese President Xi Jinping recently revealed updated plans, first disclosed in 2013, for a modern-day Silk Road establishing trade links via road, rail and sea between China, Central Asia, Europe and Africa, and involving over 60 countries. The projects include ports, airports, railways, roads, bridges, tunnels, power facilities, solar farms and pipelines. It has been estimated that China has already spent $900 billion on these infrastructure projects and plans to continue to invest $150 billion annually. The announcement was made at a summit in Beijing called the Belt and Road Forum for International Cooperation, attended by 29 heads of state, including Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan. Notably, India boycotted the summit because of concerns about environmental damage and debt burdens. Chinese banks are financing most of the work with the goal of exporting Chinese technology and products and developing business for Chinese engineering and construction companies. Expertise has been developed and experience gained on huge infrastructure projects within China, and these companies are now prepared and willing to work in difficult, high-risk areas, including Pakistan, Iraq and Nigeria. China’s official news agency characterizes the plans as part of a commitment to globalization and openness. Major U.S. firms, such as GE, Honeywell and Caterpillar, already conduct business in China and are also seeking opportunities in the new Silk Road.

Western and other world leaders often question how much China is spending on infrastructure and whether it is over-extended. The Chinese initiative is largely driven by state-owned banks and companies and is an extraordinarily ambitious attempt to tie almost two-thirds of the world’s population to its economy and products. The Trump Administration’s $1 trillion initiative, on the other hand, will be exclusively focused on domestic projects and will rely more heavily on the private sector. As the United States clearly benefits from a sophisticated legal system, relative stability and private sector innovation, the potential opportunities for those interested in infrastructure in this country are clearly less daunting, notwithstanding the political climate. The President and COO of the Carlyle Group, Glenn Youngkin, has predicted that the Trump Administration will begin filling in the details of its initiative in the next few weeks and notes that infrastructure development has bipartisan support in Washington. Carlyle is also attempting to attract global funding sources to public-private infrastructure partnerships and sees airports in the United States as a top target.