Since the Trump administration began to dismantle the United States Agency for International Development (USAID), many commentators have seen an opportunity for China. They argue that Beijing will “fill the void” left by Washington and is “cheering” the destruction of the agency. Fear of China supplanting U.S. foreign aid has been a growing concern among U.S. analysts for years. Since President Donald Trump began gutting USAID, China has already stepped in to replace U.S. projects in a few countries, such as Nepal and Cambodia.
But it won’t be easy for Beijing to step into Washington’s shoes, both due to the scale of U.S. assistance and the level of domestic opposition that the idea of increasing foreign aid engenders in China. The Chinese Communist Party (CCP) and the public are both resistant to the idea, and there is little appetite for China to replace U.S. projects of the scale of PEPFAR, the global HIV/AIDS initiative, or the more than 1 million metric tons of food aid that USAID provides annually.
Since the Trump administration began to dismantle the United States Agency for International Development (USAID), many commentators have seen an opportunity for China. They argue that Beijing will “fill the void” left by Washington and is “cheering” the destruction of the agency. Fear of China supplanting U.S. foreign aid has been a growing concern among U.S. analysts for years. Since President Donald Trump began gutting USAID, China has already stepped in to replace U.S. projects in a few countries, such as Nepal and Cambodia.
But it won’t be easy for Beijing to step into Washington’s shoes, both due to the scale of U.S. assistance and the level of domestic opposition that the idea of increasing foreign aid engenders in China. The Chinese Communist Party (CCP) and the public are both resistant to the idea, and there is little appetite for China to replace U.S. projects of the scale of PEPFAR, the global HIV/AIDS initiative, or the more than 1 million metric tons of food aid that USAID provides annually.
Chinese foreign aid currently totals between $5 billion and $8 billion per year, compared to the United States’ $63 billion before Trump’s second term. As Yun Sun, an expert on Chinese foreign policy, has documentedassistance to Africa and other regions has often met with criticism in the Chinese public sphere. The Global Timesa nationalist tabloid owned by the CCP, has even argued that the benefits of foreign aid cannot be openly discussed due to public skepticism.
Part of this reluctance is because of China’s own development position: Despite the country’s economic rise to the ranks of upper-middle-income countries, its per-capita income remains roughly one-seventh of that of the United States. Chinese President Xi Jinping has emphasized eradicating poverty at home, but large swaths of the countryside and many urban migrants still live in impoverished conditions.
China’s leadership is also careful to avoid the terminology of “aid” or “donor.” Officially, Xi has said that China “will always remain a member of [the] developing countries,” and China maintains its developing nation status within the World Trade Organization. And rather than presenting the country as a donor, official Chinese documents describe international aid activities as a form of “south-south cooperation.” All this has led the Chinese public to wonder why they should provide aid to foreigners when many people in China are still struggling.
Xi himself may need convincing of the political value of increasing aid. The Chinese leader has frequently criticized so-called welfarism at home, echoing a common conviction among the Chinese elite that too much government assistance creates laziness and dependence. Xi has argued that Latin American countries became overly dependent on welfare, leaving them in a “middle-income trap.” Foreign aid is sometimes framed by Xi and other Chinese leaders as creating similar problems, using language originating in the West and even adopted by the Trump administrationsuch as “trade, not aid.”
China hasn’t always been so stingy. In the early 1970s, the country was a generous provider of foreign aid proportional to the size of its economy, offering assistance equivalent to an astonishing 5.88 percent of its GDP. Within the communist world, China sought to establish primacy over its then-main geopolitical rival, the Soviet Union. Much of this aid supported anti-colonial movements and socialist partners, although it also included some grand projects, such as the Tanzania-Zambia railway.
However, by the end of the 1970s, China had radically rethought its foreign aid engagements. In the run-up to its so-called reform and opening period, China’s average foreign aid expenditure dropped by 55 percent between the five-year plan periods of 1971 to 1975, and 1976 to 1980. This shift was driven by the unsustainability of focusing so much capital overseas when the domestic economy needed serious repair after the Cultural Revolution ended in 1976, and a recognition that tensions with the Soviet Union were easing. But later, as Western countries shunned China after the Tiananmen Square massacre in 1989, its government pivoted to re-engage with much of the global south.
Instead of aid, Beijing began to prioritize the trade finance that has dominated Chinese engagements ever since. This most typically involves loans extended by an export credit agency called the Export-Import Bank of China for borrowers to cover the costs of exported Chinese goods and services. These loans could cover anything from infrastructure to vehicles to telecommunications equipment.
Indeed, a common misconception by analysts has been to define Chinese export credits and preferential loans to foreign governments and institutions as “development finance,” perhaps because much of it (although certainly not all of it) is flowing to “developing countries.” Though some Chinese loans were concessional enough to be recognized as foreign assistance under Organization for Economic Co-operation and Development definitions, the reality is that much of it was commercial—as has been documented for some time.
To be sure, China has offered to replace a few small USAID programs in recent months, but so far largely in countries where Beijing has extensive existing ties with the government or an immediate strategic interest. In CambodiaChina has given $4.4 million to assist a demining program abandoned by the United States. That pales beside the billions provided in trade finance to Cambodia. In Nepal, China has reportedly offered to replace U.S. assistance, but details are scant. Nepal’s proximity to China’s disputed border with India also makes it especially central to Beijing’s Himalayan strategy.
Fearing that China will fill the gap left by U.S. foreign assistance may miss the point. Beijing is aware of the rapid change in the international world order. It will seize political opportunities where possible, but it does not seek to simply copy Washington’s soft-power blueprint on the global stage. And just because China’s rise has been fueled by the liberal world order does not mean that it seeks to adopt all of its principles.
We must be careful not to assume that China will blindly fill the vacuums left behind by the current U.S. administration’s retrenchments. It may well see things the same way, albeit for its own reasons.
