Could US aid cuts open opportunities for China to expand global influence?

Experts argue that freezing foreign aid weakens USA's soft power, allowing China to strengthen its influence, especially in Southeast Asian countries

President Donald Trump’s decision to freeze US foreign aid has raised alarms among policymakers and international relations experts, who fear that China will expand its influence. The move has already had repercussions in countries such as Nepal, where US-funded infrastructure projects have been thrown into uncertainty, potentially strengthening Beijing’s soft power in the region.

 

Nepal fears China rise amid US aid freeze

Nepal, China’s, had been negotiating with Beijing over major infrastructure financing when the US stepped in with an alternative offer. America pledged $500 million in grants over five years to improve Nepal’s electricity grid and road networks.

 

However, with the Trump administration’s freeze on foreign aid, the future of this project remains uncertain.

 

As quoted by The New York Times, Rajendra Bajgain, a lawmaker from Nepal’s governing Nepali Congress party, who strongly supported the US-backed initiative, said, “This is quite shocking… They are making it easier for our neighboring countries, especially the Chinese, who are enjoying themselves. They will come to our office and say, ‘See, this is how America acts.’”

 

China steps in for Cambodia

Another stark example of this shift can be seen in Cambodia. While the US halted a $6.3 million grant from the State Department’s Office of Weapons Removal and Abatement -- funding intended to clear unexploded American ordnance left from past conflicts -- China stepped in with a $4.4 million contribution to support demining efforts. Heng Ratana, director-general of the Cambodian Mine Action Centre, told local media earlier this month that the Chinese aid would help clear more than 3,400 hectares (8,400 acres) of land contaminated with landmines and other remnants of war.

 

This trend is not limited to Cambodia. Analysts say that the suspension of US-backed health, education, and humanitarian programmes could leave strategic gaps that China is well-positioned to fill. "This strategic retreat could strengthen Beijing’s influence across the region, particularly in current US aid recipients like Indonesia, the Philippines, Myanmar, and Cambodia," said Yanzhong Huang, a senior fellow for global health at the Council on Foreign Relations, in an interview with Al Jazeera.

 

US lawmakers divided on risks

Within the US, opinions are divided on the implications of reducing foreign assistance. While some lawmakers see the cuts as a necessary reevaluation of spending priorities, others warn of the risks of stepping back from international commitments.

 

Senator Andy Kim, a Democrat from New Jersey, voiced concerns that the US is making it easier for China to expand its global influence. “China doesn’t even need to fight for their influence around the world now because of our own efforts,” he said on NBC’s Meet the Press.

 

Conversely, Representative John Moolenaar, a Republican from Michigan and chair of the House Select Committee on the Chinese Communist Party, believes reforming foreign aid is necessary. “I think as we dig into this, we’re going to find out what’s been working and what hasn’t been working,” he said, as quoted by the Associated Press, suggesting a reevaluation of how US assistance is structured. 

 

US vs Chinese foreign aid approach

While both the US and China are major players in global development, their approaches to foreign assistance differ significantly.

 

AidData, a research institute at William & Mary University, reports that between 2000 and 2021, China spent approximately $1.34 trillion on 18,000 overseas development projects, averaging around $61 billion annually. These funds are primarily issued as debt and directed towards infrastructure and energy projects.

 

In contrast, the US disbursed $1.24 trillion in foreign aid between 2001 and 2023, including military assistance. A large portion of US aid is provided as grants or low-interest loans and focuses on humanitarian efforts, public health, and economic development. For example, US funding has supported HIV/AIDS treatment in Africa, food assistance in South Sudan, and refugee care in Mexico.

 

Experts argue that while China may not entirely replace the US in foreign aid, Beijing stands to benefit from Washington’s retreat. Foreign assistance is not just about financial contributions – it is a means of building long-term relationships and trust with partner nations.

 

As the US recalibrates its foreign aid policies, the long-term effects remain uncertain.