The Evolving Landscape of Global Aid: Will China Fill the Void?
As the United States significantly reduces its international aid, the Global South and traditional donor communities are left wondering if China will step in to fill the void. A closer examination reveals that while China’s influence is growing, replacing USAID in the foreign assistance space is improbable. Let’s delve into the key factors that influence this dynamic.
The Giant Gap in Aid Size
China’s foreign aid has consistently been a fraction of America’s. A common misconception is that China’s Belt and Road Initiative (BRI) is aid. In reality, the BRI consists predominantly of loans and investments. By the end of 2022, the Export-Import Bank of China disbursed $327 billion, and by the end of 2023, Chinese commercial entities invested $300 billion. Fudan University estimates that China’s cumulative BRI engagement between 2013 and 2023 amounted to $1.053 trillion, with about $634 billion in construction contracts and $419 billion in non-financial investments. Essentially, the BRI is a mix of commercial activities with a developmental tint, not foreign aid.
Comparatively, in the 2023 fiscal year, USAID’s budget was approximately $42 billion, broken down as follows:
- Governance: $17 billion
- Humanitarian Assistance: $9.4 billion
- Health and Population: $7 billion
- Administrative Costs: $3.5 billion
- Agriculture: $1.3 billion
- Education: $1.1 billion
- Infrastructure: $740 million
- Economic Development: $720 million
Other U.S. agencies also contribute significantly to foreign assistance, including:
- State Department: Nearly $19 billion
- Department of Treasury: About $2 billion
- Department of Agriculture: About $450 million
China’s Foreign Aid: The Numbers
China’s foreign aid is significantly smaller. According to China’s 2021 foreign aid white paper, between 2013 and 2018, China’s total foreign aid reached approximately $42 billion, or an average of $7 billion annually. During the same period, the U.S. spent $286 billion, or $47.7 billion per year. This means that from 2013 to 2018, Chinese aid was only 14.6% of what America spent. In 2024, the total foreign aid budget for China’s two primary aid agencies, the Ministry of Commerce (MOFCOM) and the China International Development Cooperation Agency (CIDCA), is $2.85 billion.
Why China and the U.S. Use Aid Differently
The United States and China employ aid very differently. Chinese foreign aid is divided into three categories: grants, zero-interest loans, and concessional loans. Grants are traditional foreign aid projects, including welfare, capacity building, technical assistance, humanitarian assistance, material support, and South-South cooperation aid. Zero-interest loans are used for public facilities and social projects, while concessional loans are used for large infrastructure and production projects.
A key takeaway from historical data is the significant increase in China’s spending on concessional loans since 2009, coinciding with the push for hard infrastructure under the BRI. These loans are aimed at promoting the export of Chinese services and products, often using the recipient countries’ natural resources as collateral.
The USAID vs. China Aid Comparison
| Criteria | USAID | China’s Aid |
|---|---|---|
| Total Budget (2023) | $42 billion | $2.85 billion (Estimated 2024) |
| Grants | $3.29 billion (2013-2018) | $1.5 billion (Potential 2024) |
| Motivation | Humanitarian and development | Economic, political returns |
| Focus | Broad range (health, education, etc.) | Infrastructure, exports |
Will China Step In?
Given China’s sluggish economy and the uncertainty of the past few years, China does not see foreign aid as a priority. The withdrawal of U.S. foreign assistance leaves China with more influence in a smaller space, but it doesn’t mean China can fill the void. China’s aid is driven by economic and political motives, which do not align with USAID’s traditional humanitarian work.
China has its own capacity-building programs, focusing on training political elites and government officials from Africa and Southeast Asia. These programs are aimed at promoting China’s governance model and political ideology. China is unlikely to augment these programs in response to the U.S. withdrawal, but their influence could grow in recipient countries over time.
For global nontraditional security threats such as food security, climate change, health, and disease control, China is more likely to resort to acting through multilateral organizations rather than taking unilateral action. However, China will seek to exploit the opportunity of American withdrawal to portray the United States as an irresponsible great power, even if U.S. assistance levels continue to exceed China’s.
Case Study: U.S. Withdrawal from Syria
China’s ambassador to Syria recently met with the country’s new president, Ahmad Al-Sharaa. Any discussion of Chinese aid to Syria’s post-conflict reconstruction will start with the Chinese question of Uyghur militants serving in the Syrian army. Similarly, in Ukraine and Gaza, China will seek political, diplomatic, and economic returns for its assistance, using its contributions to consolidate ties with the Muslim world and Europe, respectively.
FAQ Section
Q: Will China’s aid completely replace USAID’s role?
A: No, China’s aid is significantly smaller and driven by different motivations, focusing more on economic and political returns rather than humanitarian assistance.
Q: What are the key differences between U.S. and Chinese aid?
A: The U.S. aid is more broadly focused on humanitarian and development projects, while China’s aid is heavily concentrated on infrastructure and economic returns.
Q: How will China’s role change if the U.S. reduces its aid further?
A: China will likely seek to exploit the situation to portray the U.S. as irresponsible, but it won’t fill the void completely due to its smaller aid budget and different priorities.
Did You Know?
China’s concessional loans are often used to promote the export of Chinese services and products, which can create a cycle of dependence on Chinese goods and services for recipient countries.
Pro Tips
- Stay Informed: International aid dynamics are constantly changing. Stay updated on policy shifts and economic trends to understand the evolving landscape.
- Explore Joint Efforts: Both China and the U.S. have specific strengths. Collaborations in certain areas, such as disaster relief or climate change, could yield better outcomes.
Reader Question
What do you think will be the most significant impact of the U.S. reducing its international aid?
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