China rises in Southeast Asia as Western donors pull back

China is set to expand its influence over Southeast Asia's development as the Trump administration and other Western donors slash aid, a study by an Australian think tank said Sunday.

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The region is in an “uncertain moment", facing cuts in official development finance from the West as well as "especially punitive" US trade tariffs, the Sydney-based Lowy Institute said.

"Declining Western aid risks ceding a greater role to China, though other Asian donors will also gain in importance," it said.

Total official development finance to Southeast Asia -- including grants, low-rate loans and other loans -- grew "modestly" to US$29 billion in 2023, the annual report said.

But US President Donald Trump has since halted about US$60 billion in development assistance -- most of the United States’ overseas aid program.

Seven European countries -- including France and Germany -- and the European Union have announced US$17.2 billion in aid cuts to be implemented between 2025 and 2029, it said.