Western Aid to Southeast Asia Is Cut, While China's Influence Continues to Grow

Study: Western Aid Cuts to Southeast Asia Will Expand China's Influence

Australian think tank Lowy Institute for International Policy released a study on July 20 showing that the Trump administration and other Western donors have significantly cut aid, which will further expand China's influence in Southeast Asian development.

Central News Agency cited AFP report, stating that the Lowy Institute in Sydney pointed out that due to the reduction of official development financing by the West and the "extremely punitive" trade tariffs of the United States, Southeast Asia is in an "uncertain period."

The Lowy Institute also noted: "There is a risk of Western aid cuts handing a larger role to China, but the importance of other Asian donors will also increase."

According to the institute's annual report, the total official development financing received by Southeast Asia in 2023 "slightly" increased to $2.9 billion. However, since Trump, the U.S. has suspended up to about $60 billion in development assistance, most of which is part of the U.S. foreign aid programs.

According to the report, seven European countries including France and Germany, as well as the European Union, have announced cuts of $17.2 billion in aid to be implemented between 2025 and 2029. The UK also said it would reduce its annual aid by $7.6 billion to reallocate funds to defense.

This study predicts that overall official development financing to Southeast Asia will decrease by more than $2 billion before 2026, and these cuts will severely impact Southeast Asia.

The study states that the center of gravity of development financing in Southeast Asia seems to be shifting eastward, especially toward Beijing, but Tokyo and Seoul also have their roles. As Western development aid decreases, China's relative importance as an actor in the region's development will increase.

The report pointed out that in 2023, Beijing's development financing to Southeast Asia increased by $1.6 billion to $4.9 billion, mostly through large infrastructure projects such as rail connections in Indonesia and Malaysia. At the same time, China's infrastructure commitments to Southeast Asia have increased fourfold to nearly $1 billion, largely because the Kyaukphyu Deep Sea Port project in Myanmar was restarted.

Original: https://www.toutiao.com/article/1838238919283915/

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