As the United States reduces its humanitarian assistance in Southeast Asia, analysts suggest that China may take advantage of the situation to enhance its influence in the region. Following the inauguration of President Donald Trump, the U.S. government has frozen nearly all foreign aid and initiated moves to effectively dismantle the U.S. Agency for International Development (USAID), a key player in promoting American soft power abroad.
In the past year alone, USAID allocated approximately $860 million to Southeast Asia, funding a variety of initiatives ranging from HIV treatment to biodiversity conservation and local governance enhancement. However, many of these projects, which primarily operate through grants to local non-governmental organizations, now face an uncertain future as the Trump administration adopts an “America first” approach, pulling back from international commitments.
This strategic retreat by the U.S. could create openings for China, according to Yanzhong Huang, a senior fellow at the Council on Foreign Relations. He noted that the suspension of critical health, education, and humanitarian programs may enable China to fill the resulting void, particularly in countries that have relied on U.S. aid, such as Indonesia, the Philippines, Myanmar, and Cambodia.
In response to the U.S. aid freeze, China has already stepped in to provide support. Recently, it pledged $4.4 million for a de-mining project in Cambodia, which had been left in limbo by the U.S. This initiative aims to help clear over 3,400 hectares of land contaminated by landmines and unexploded ordnance, as confirmed by Heng Ratana, head of the Cambodian Mine Action Centre.
Joshua Kurlantzick, another senior fellow at the Council on Foreign Relations, remarked that the decline of USAID coincides with a broader waning of U.S. influence in Southeast Asia. He highlighted concerns among Southeast Asian leaders regarding the erratic policymaking of the U.S., especially in nations like Vietnam, Indonesia, and Thailand, where American aid and security assistance have been significant.
Kurlantzick also pointed out that Beijing is already portraying the U.S. as indifferent and incapable of leading both regionally and globally. He anticipates that China will ramp up its aid and investment across various developing nations in response to the U.S. withdrawal.
While the future of USAID programs remains uncertain, some experts believe that China may not fully replace U.S. initiatives. John Gong, an economics professor in Beijing, expressed skepticism about China’s willingness to compete with the U.S. in ideological aid areas, suggesting that other partners like the European Union, Australia, and Japan may step in to fill this gap.
China’s foreign assistance strategy has primarily focused on infrastructure development, as exemplified by its Belt and Road Initiative, which is estimated to involve over $1 trillion in investment. However, this approach has not always been well-received due to project delays and budget overruns, leading to concerns about "debt-trap" diplomacy, a claim that China has consistently denied.
Despite being a prominent donor in the region from 2015 to 2019, China’s overall development assistance has seen a decline, dropping from $10 billion in 2017 to $3 billion in 2022. Economic challenges at home, including slowing growth and rising youth unemployment, may hinder China’s ability to significantly increase its overseas aid, according to political science expert Steve Balla.
Moreover, recent surveys indicate that while many Southeast Asians view China as the most influential economic power, there is a substantial level of distrust towards it. Many respondents expressed concerns about potential economic or military threats posed by China, while Japan was perceived as the most trustworthy major power, followed by the U.S. and the EU.
In a bid to diversify its assistance model, China has begun to shift towards providing more soft aid in sectors like public health and agriculture. However, the extent of this shift may be constrained by its domestic economic challenges.
As the geopolitical landscape evolves, Southeast Asian countries are increasingly favoring a diversified approach to foreign aid, seeking to avoid dependence on any single donor, whether it be the U.S. or China.