China's Rising Influence: Shaping Asia's Aid Future

As the U.S. scales back aid, China emerges as a potential key donor in Asia. However, China's focus on infrastructure loans rather than social development leaves gaps in areas like democracy and health. South Korea and Japan could step up but need to increase their aid budgets significantly.

MANILA — In the wake of the United States reducing foreign assistance, experts have identified China as a key player poised to fill the vacuum, though with distinct limitations. Unlike the U.S., China's foreign aid is centered around infrastructure projects, often through loans, avoiding areas such as media freedom and civil rights.

Despite having the world's second-largest economy, China's willingness to embrace a broader development role remains uncertain. Chinese assistance, primarily in non-concessional loans, has declined recently, even as the nation provided around $5.5 billion annually in official development finance to Southeast Asia from 2015 to 2021.

Analysts suggest that while China's focus diverges from U.S. priorities, countries like South Korea and Japan might raise their stakes but would require significant aid budget increases to offset the U.S. retreat. Yet, as China edges toward offering climate finance, its global development role is undoubtedly evolving.

(With inputs from agencies.)