China‘s infrastructure financing in Southeast Asia is growing, increasing its regional sway as the United States and European Union reduce foreign aid, according to a new report from an Australian think tank.
With the U.S. administration under President Trump reportedly cutting about $60 billion in aid and European nations withdrawing over $25 billion, the Lowy Institute report, released today, suggests Southeast Asia’s advancement finance landscape is shifting eastward. This pivot is notably towards Beijing, but also includes Tokyo and Seoul.
Alexandre Dayant, Grace Stanhope, and Roland Rajah, the report’s lead authors, stated that while China is the largest infrastructure financing partner in Southeast Asia, customary donors collectively still outspend it. They added that as Western aid declines and China adjusts its strategy, Beijing is positioned to regain dominance.
Traditional partners for Southeast Asia include nations like the U.S. and Australia, alongside international organizations such as the United Nations, the Asian Development Bank, and the World Bank.
With the U.S. anticipated to decrease its foreign assistance by 83% this year, coupled with funding reductions from Europe and trade uncertainties impacting U.S. ties with other countries, China is bolstering its regional influence through infrastructure projects. Recent examples include advancements on high-speed rail connections with Vietnam and Thailand.
Li Ming, a spokesperson for the China international Development Cooperation Agency, stated in March that China’s principles regarding foreign aid, including non-interference in internal affairs, the absence of political conditions, and the fulfillment of promises, will remain unchanged.
He further commented that a major contry should act responsibly by undertaking its international obligations and duties, rather than retracting commitments, acting out of self-interest, or engaging in bullying.
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