On May 23, the Trump administration formally announced its aim to drastically cut U.S. spending on foreign aid and diplomacy, reducing it by $17 billion in the 2018 federal budget proposal. A week earlier, Chinese President Xi Jinping announced China’s plan to invest $14.6 billion in development projects around the world—just a fraction of the $1.6 trillion he has spoken of investing globally over the next decade.
Even if Trump’s cuts passed in full, which is highly unlikely, the United States would still spend more than twice what China does on foreign aid and remain the world’s leading contributor to the United Nations. But both nations are heading in new directions: as the United States withdraws from the international sphere on non-military issues, China is investing heavily in infrastructure and trade projects around the world, and stepping up its diplomatic efforts. Beijing appears to be positioning itself to succeed America as the guarantor and central shaper of the global order, and the Trump administration appears to be indirectly encouraging it.
The Trump Effect
In a New York Times op-ed, former Secretary of State Colin Powell joined a growing chorus of former and current government officials, corporations, and humanitarian organizations criticizing Trump’s proposed cuts. Powell noted that while Trump wants to contract U.S. spending overseas, China’s development budget has grown nearly 800 percent in Africa alone since 2003 and continues to grow around the world. “It’s not ‘America first’ to surrender the field to an ambitious China rapidly expanding its influence, building highways and railroads across Africa and Asia,” Powell wrote. United Nations Secretary-General Antonio Guterres has also suggested that China will step in if the United States pulls back, as Trump would like, from its role as the top funder to the UN and its peacekeeping operations.
In just five months, Trump has pulled the United States out of a historic agreement on climate change with nearly all other countries in the world and set NATO allies on edge by hesitating before publicly asserting allegiance to the treaty’s mutual defense pact. His 2018 proposed budget would reduce foreign aid and diplomacy by a third while increasing defense spending by 10 percent. Though his proposed budget cuts to the State Department and related agencies are likely to be reduced by Congress, Trump has clearly signaled that his administration values hard power over soft.
Trump has clearly signaled that his administration values hard power over soft.
China Vying for Lead Role
Just as increased isolationism has been central to President Trump’s foreign policy, President Xi has made increased international investment a lynchpin of his, pushing “international cooperation” and “win-win partnerships.” Today, more than one hundred countries rely on China as their largest trading partner. Xi speaks of investing in conflict-wracked nations of the Middle East as a way of bringing peace, and in poor regions as a way to alleviate poverty, while simultaneously helping China progress further along its own development path. “Development holds the master key to solving all problems,” Xi said in his opening remarks at an international summit encouraging investment in Chinese-led projects around the world in Beijing on May 15–16.
Though not as well-attended as was hoped, the May summit was greeted with much fanfare as a showcase for the “Belt and Road Initiative,” China’s big push to increase global trade by investing in infrastructure to connect markets in Asia, Africa, and the Middle East. The initiative has been called a Chinese version of the Marshall Plan. Most of the Chinese investment is profit-driven, but aid also plays a role. Xi committed billions at the summit in special lending programs and increased cooperation with multilateral development institutions including the World Bank, and has pledged to commit nearly $9 billion in food aid and health and poverty alleviation projects over the next three years to developing countries and international organizations participating in the Belt and Road project.
Aid On the World Stage
Members of the major donor committee of the Organization for Economic Cooperation and Development (OECD) including the United States, UK, France, Germany, and Japan still far outspend China on foreign aid, but China’s development budget is growing. America has spent around $30 billion per year in aid since 2005, while China has slowly but steadily increased from around $1 billion to $7 billion annually (China’s per capita GDP of around $8,000 is far below the United States $56,115, and the average $36,095 for OECD members). According to the World Bank, China has been the largest contributor to growth in the global economy since the financial crisis of 2008. It is the largest donor country outside of the OECD, and its foreign aid budget has grown at an average rate of 21.8 percent annually.
China has also steadily increased its contributions over the past two decades to become the third-largest funder of the UN today at just under 8 percent, and the second-largest funder of peacekeeping operations at 10 percent. The United States currently pays 22 percent of the United Nations core budget, and nearly a third of the peacekeeping budget. But Trump’s budget would cut contributions to both, with the expectation that the “funding burden be shared more fairly among members.” He does so at America’s peril—as it contributes less funding, Washington will also have less say over international policy.
Chinese foreign aid is difficult to measure and compare to that of OECD members in large part because it is considered a state secret. Chinese officials celebrate their aid for coming with “no political strings attached,” citing the principles of “mutual benefit” and “non-interference.” For these same reasons, Western leaders often characterize Chinese foreign aid as mercantilist, non-democratic, and nontransparent. No matter how China frames its aid rhetorically, many of its projects leave recipient governments heavily indebted to China, or place China partially in control of key infrastructure like ports. During a 2015 trip to Africa, President Barack Obama accused China of funnelling “an awful lot of money into Africa, basically in exchange for raw materials that are being extracted from Africa.” In 2011, then Secretary of State Hillary Clinton warned of China’s “new colonialism” and the danger that Beijing may “undermine good governance in Africa.”
China also conducts all of its assistance through official channels, leaving out civil society groups, which has led to criticism that it supports authoritarian governments and contributes to corruption. Furthermore, there has been some confusion about which of China’s development activities can be considered aid, and which are simply for-profit overseas ventures.
In the face of such criticism, Beijing has recently made more of an effort to improve communication and release public information on its development activities, publishing two white papers in 2011 and 2014. The Chinese government has also begun to develop more public-private partnerships with civil society. And researchers from AidData, who developed an open-source database of China’s aid flows into Africa, contend that the Chinese investment most similar to what the West sees as foreign aid (OECD-classified “official development assistance” or ODA) is allocated in a similar way to that of OECD donors, and does not favor corrupt regimes.
Secretary of State Rex Tillerson is facing tough questioning this week in four congressional hearings on Trump’s budget. By all accounts, President Trump’s proposed cuts to the international affairs budget are highly unlikely to be approved by Congress. Legislators on both sides of the aisle have voiced their disapproval, as have retired generals and business leaders with economic interests overseas. Even the president’s United Nations ambassador Nikki Haley appeared to be running damage control, visiting with Syrian refugees on a trip to the Middle East when the proposal was released.
Though China is still billions behind the U.S. in terms of foreign assistance and development projects around the world, Trump’s plans to cut back could give it a nudge in the rankings moving forward.
Though China is still billions behind the U.S. in terms of foreign assistance and development projects around the world, Trump’s plans to cut back could give it a nudge in the rankings moving forward. There is certainly less baggage for aid recipients accepting assistance from China than there is with former colonial powers, and the “no strings attached” refrain is an attractive (if possibly misleading) one. With China’s economic slowdown it is possible that their ambitious overseas programs will falter, but in the meantime, Beijing appears to be ramping up right where Washington is stepping back.
Cover Photo: Chinese engineers from the United Nations peacekeeping force in Lebanon (UNIFIL) work at a blindage construction site in the UNIFIL mission area in the country’s south. Source: mod.gov.cn/Ling Tao.