According to experts, China is well-positioned to take over from the United States as a major foreign donor in Asia but might hesitate to completely step into the breach. Meanwhile, both South Korea and Japan could find it challenging to provide sufficient support.
From crucial maternal healthcare initiatives to financing disaster response efforts, vital programs across Asia now stand at risk following actions taken by former U.S. President Donald Trump, who suspended foreign assistance and sought to dismantle the United States Agency for International Development (USAID).
Although China ranks as the globe's second-biggest economy, its international aid significantly differs from that of the U.S., with experts explaining that Beijing mainly offers repayable loans and concentrates on building infrastructures.
'It is highly improbable that China will take the lead in addressing issues like promoting democracy, ensuring press freedoms, supporting civil societies, and advancing LGBT or women’s rights,' stated Melissa Conley Tyler, who serves as the executive director of the Asia-Pacific Development and Defence Dialogue, an Australian think tank.
It is crucial that other donors do not allow these critical sectors to suffer due to the reductions in U.S. foreign aid.
In 2024, the U.S. distributed approximately US$56 billion (around 1.9 trillion baht) in international aid worldwide, with $32.48 billion handled via USAID according to official government statistics. The records also indicated that around $7 billion of this total went towards supporting nations in South, Central, and East Asia along with Oceania.
Although China doesn’t readily disclose details on its foreign aid, the Lowy Institute reported in their 2023 study that from 2015 to 2021, China provided approximately $5.5 billion annually in official development finance (ODF) to Southeast Asian nations, with infrastructure projects receiving around three-fourths of this funding.
According to the report, most of China's funding is provided through non-concessional loans.
Alexandre Dayant, the deputy director of the Indo-Pacific Development Centre at the Lowy Institute, mentioned that the U.S. withdrawal presents "a chance for China to reshape its position in global development," though he doesn’t anticipate China will seize this opening.
"China has traditionally concentrated on financing infrastructure projects — do not anticipate it stepping up to replace U.S. funding for democracy, health, or education," stated Mr. Dayant.
According to the report, "China has served as Southeast Asia's primary provider of official development finance," however, this financial support from China has seen a downturn recently.
Specialists mentioned that both South Korea and Japan might contribute more assistance, yet achieving significant impact would require them to notably boost their foreign aid allocations.
Previously a beneficiary of international aid, South Korea has allocated an ODA budget of $4.8 billion for the year 2024 — marking a historic high for the nation. The OECD reports that the country intends to increase this amount over twofold by 2030.
'Ian Mitchell, a senior policy fellow at the Center for Global Development (CGD), noted that South Korea has recently intensified its role as an aid contributor, and with its current economic status, it has the potential to increase its contributions further,' he stated.
However, according to OECD data from 2023, the combined aid budgets of South Korea and Japan amounted to more than $22 billion. This figure represents just under one-third of the $80 billion that the United States claimed it allocated for foreign assistance during the same period.
Mr. Mitchell stated that 'substituting US support would necessitate a significant boost.' He also mentioned that Japan’s assistance initiatives were already concentrated on the area.
Although China's objectives diverge from those of the United States, many believed that China would be unwilling to pass up the chance to increase its clout in the area.
Previously, China’s aid primarily took the form of loans aimed at helping other nations develop different kinds of infrastructure projects. However, I believe we'll see China significantly boost grant-based assistance throughout Asia—a clear chance for China to further reduce U.S. influence in the area—according to Joshua Kurlantzick, a senior fellow at the Council on Foreign Relations.
Mr. Mitchell indicated that there are already certain indications suggesting China is venturing into uncharted territory.
"China admitted that it offered climate financing for the first time last year, which could indicate that it is becoming more at ease with being recognized as a supporter of developmental aid," he stated.
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