1. Hedging bets: Southeast Asia’s approach to China’s aid
- Author:
- Alexandre Dayant and Grace Stanhope
- Publication Date:
- 03-2025
- Content Type:
- Commentary and Analysis
- Institution:
- Lowy Institute for International Policy
- Abstract:
- Southeast Asian states with acute development needs and constrained access to development financing — Cambodia, Laos, and Myanmar — are the most reliant on China. By contrast, lower-middle income countries with more diversified foreign relations — the Philippines and Vietnam — have become far more restrained in accepting Chinese largesse over the last decade. Upper-middle income countries with only moderate development needs — Indonesia, Malaysia, and Thailand — appear to be playing the field of development partners the most opportunistically and politically. Amid weakening demand for Chinese development financing in Southeast Asia, Beijing is recalibrating its offering, transitioning to fewer, smaller, and more targeted projects. In 2022, China implemented $3 billion in development financing in the region, a sharp drop from more than $9 billion in 2015. However, Southeast Asia’s success in reshaping their development ties with China could be undone if Western cuts to development budgets lead to a drastic reduction in financing to the region.
- Topic:
- Foreign Policy, Foreign Aid, and Economic Development
- Political Geography:
- China, Vietnam, Philippines, Cambodia, Southeast Asia, Laos, and Myanmar