China is best placed to replace the US as a key foreign donor in Asia, but might be reluctant to fully fill the void, while South Korea and Japan might struggle to give enough, experts said.
From critical maternal healthcare to funding disaster relief, life-saving projects in Asia hang in the balance after US President Donald Trump paused foreign aid and moved to dismantle the US Agency for International Development (USAID).
While China is the world’s second-largest economy, its foreign assistance looks very different from that of the US, as Beijing primarily provides loans that need to be paid back and focuses on infrastructure projects, experts said.
“China is very unlikely to step up to fill gaps in areas such as democracy promotion, media freedom, civil society, and LGBT or women’s rights,” said Melissa Conley Tyler, executive director of Asia-Pacific Development & Defence Dialogue, a think tank in Australia.
“It is vital that other donors don’t let these vital areas be a casualty of the US foreign assistance cuts,” she said.
The US last year disbursed US$56 billion globally in foreign assistance, US$32.48 billion of which was managed through USAID, US government data showed.
About US$7 billion of the US’ total global foreign aid last year was given to South, Central and East Asia, as well as Oceania, the data showed.
While China does not make its foreign aid data readily available, the Lowy Institute said in its 2023 report that China disbursed about US$5.5 billion a year in official development finance to Southeast Asia from 2015 to 2021, three-quarters of which went to infrastructure.
The vast majority of China’s financing is disbursed in the form of non-concessional loans, the report said.
Alexandre Dayant, deputy director of the Indo-Pacific Development Centre at the Lowy Institute, said the US’ retreat represented “an opportunity [for China] to redefine its role in global development,” but he did not expect China to take that opportunity.
“China has historically focused on infrastructure financing — don’t expect it to step in for US funding on democracy, health or education,” Dayant said.
The report said “China has been Southeast Asia’s single largest source of official development finance,” but that its financing has been in decline in the past few years.
Experts said South Korea and Japan could also step up to help, but that they would need to substantially increase their aid budgets to make a difference.
Once a foreign aid recipient, South Korea last year had an official development assistance budget of US$4.8 billion — a record for the country — and aims to more than double that by 2030, according to the Organisation for Economic Co-operation and Development (OECD).
“South Korea has been stepping up its efforts as an aid provider in recent years and its income level should enable them to do even more,” said Ian Mitchell, senior policy fellow at the Center for Global Development, a think tank.
However, South Korea and Japan’s combined aid budgets were more than US$22 billion in 2023, OECD data showed. That was less than one-third of the US$80 billion the US said it spent on foreign assistance that year.
“So replacing US support would require a substantial increase,” Mitchell said, adding that Japan’s aid efforts were already focused on the region.
While China’s priorities differ from those of the US, some said China would not miss the opportunity to gain more influence in the region.
“In the past, its assistance had mostly come in loans to help other countries build various types of projects, but I think China will dramatically increase grants across Asia — it is an obvious opportunity for China to further diminish the United States’ influence in the region,” Council on Foreign Relations senior fellow Joshua Kurlantzick said.
Mitchell said there were already some signs that China is breaking new ground.
“China acknowledged that it provided climate finance for the first time last year; and this may signal it is more comfortable being seen as a provider of development support,” he said.
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