Asian majors may hesitate to fill aid gap left by US

China is best placed to replace the United States as a key foreign donor in Asia but may be reluctant to fully fill the void, while South Korea and Japan may struggle to give enough, experts said.

From critical maternal health care to funding disaster relief, life-saving projects in Asia hang in the balance after President Donald Trump paused foreign aid and moved to dismantle the US Agency for International Development (USAID).

While China is the world’s second-largest economy, its foreign assistance looks very different from that of the United States, as Beijing primarily provides loans that need to be paid back and focuses on infrastructure projects, experts said.

“China is very unlikely to step up to fill gaps in areas such as democracy promotion, media freedom, civil society and LGBT or women’s rights,” said Melissa Conley Tyler, executive director of Asia-Pacific Development & Defence Dialogue, a think tank in Australia.

“It is vital that other donors don’t let these vital areas be a casualty of the US foreign assistance cuts.”

The United States disbursed a total of $56 billion globally in foreign assistance in 2024, $32.48 billion of which was managed through USAID, US government data showed, according to Reuters.

About $7 billion of the United States’ total global foreign aid in 2024 was given to South, Central, and East Asia, as well as Oceania, the data showed.

While China does not make its foreign aid data readily available, the Lowy Institute said in its 2023 report that China disbursed about $5.5 billion a year in official development finance (ODF) to Southeast Asia between 2015 and 2021, three-quarters of which went to infrastructure.

The vast majority of China’s financing is disbursed in the form of non-concessional loans, the report said.

Alexandre Dayant, deputy director of the Indo-Pacific Development Centre at the Lowy Institute, said the United States’ retreat represented “an opportunity (for China) to redefine its role in global development” but he did not expect China to take that opportunity.

“China has historically focused on infrastructure financing – don’t expect it to step in for US funding on democracy, health, or education,” said Dayant.

The report said “China has been Southeast Asia’s single largest source of official development finance” but that its financing has been in decline in recent years.

Experts said South Korea and Japan could also step up to help, but that they would need to substantially increase their aid budgets to make a difference.

Once a foreign aid recipient, South Korea had an official development assistance (ODA) budget of $4.8 billion in 2024 – a record for the country – and aims to more than double that by 2030, according to the Organisation for Economic Cooperation and Development (OECD).

“South Korea has been stepping up its efforts as an aid provider in recent years and its income level should enable them to do even more,” said Ian Mitchell, senior policy fellow at the Center for Global Development (CDG), a think tank.

But South Korea and Japan’s combined aid budgets were over $22 billion in 2023, OECD data showed. That was less than a third of the $80 billion the United States said it spent on foreign assistance that year.

“So replacing US support would require a substantial increase,” said Mitchell, adding that Japan’s aid efforts were already focused on the region.

While China’s priorities differ from those of the United States, some said China would not miss the opportunity to gain more influence in the region, the Reuters report adds.

“In the past, its assistance had mostly come in loans to help other countries build various types of projects, but I think China will dramatically increase grants across Asia – it is an obvious opportunity for China to further diminish the United States’ influence in the region,” said Joshua Kurlantzick, senior fellow at the Council on Foreign Relations.