China Set to Expand Influence on S-E Asia's Development as West Cuts Aid: Study

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 on July 20.

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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 (S$37 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 US' overseas aid programme.

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, the study said.