US aid cuts are expanding Chinese influence

The Trump administration’s decision to freeze and reduce foreign aid weakens national security, creating a vacuum that China is rapidly filling through strategic lending and infrastructure investments. China leverages this influence to counter American interests, strengthen authoritarian regimes, and extend its military reach.

China has cultivated close ties with political elites and citizens in the Global South, securing influence through direct financial incentives. While China’s reputation may have declined in Western nations, it remains a favored development partner in many regions. It strengthens ties by directly funding projects in leaders’ home regions, reinforcing political loyalty. Studies show that Chinese-funded infrastructure projects are significantly more likely to be allocated to the birth regions of African presidents, reinforcing China’s strategic relationships.

Beyond economic ties, China’s development projects directly influence host nations’ foreign policy decisions. Research has linked Chinese aid to shifts in United Nations voting patterns, with democratic nations being more susceptible to Beijing’s influence than autocratic ones — likely because autocracies are already aligned with China.

In some cases, promised infrastructure projects have even persuaded countries to sever ties with Taiwan. Costa Rica, for instance, received Chinese funding for a national stadium just months after ending its diplomatic recognition of Taiwan.

China’s financial assistance extends beyond diplomacy; it also provides access to critical infrastructure that could serve military purposes. By 2024, Chinese entities controlled stakes in 129 ports worldwide, raising concerns about their potential use by the Chinese military. This influence extends to defense relationships, as demonstrated by China’s military engagements in Africa. Between 2008 and 2016, the People’s Liberation Army (PLA) conducted 294 engagements across 40 African nations, including working visits, naval port calls and military exercises aimed at strengthening defense ties.

Unlike Western aid, which often supports civil society and non-governmental organizations, Chinese foreign assistance primarily funds state-driven infrastructure projects. This approach provides governments with highly visible political “wins” that boost their domestic standing.

In many instances, governments first seek help from the U.S. and Western institutions, such as the World Bank and IMF, only to be rejected over concerns about profitability — allowing China to step in and gain long-term influence.

A notable example is Sri Lanka’s Hambantota Port. The Sri Lankan government first approached the U.S. and India for funding, citing positive feasibility studies from Canadian and Danish analysts. After being turned down, China’s Export-Import Bank financed the project, and a Chinese firm secured the construction contract. This pattern repeats worldwide, as China fills the investment void left by Western institutions.

As U.S. foreign aid programs contract, China is stepping in. Countries like Nepal, the Cook Islands and Colombia report that China has already offered financial assistance to compensate for reduced U.S. aid. If this trend continues, China’s ability to shape global politics will only grow stronger.

The U.S. must reassess its foreign aid strategy. While promoting democracy remains crucial, infrastructure investments with visible economic benefits will be key to countering China’s rising influence. Aid programs that prioritize visible, high-impact projects can help foster goodwill and economic stability in developing countries.

Moreover, U.S.-funded projects should set a high standard for labor rights and environmental sustainability — demonstrating that democratic governance and economic development can go hand in hand.

Rather than relying on rhetoric, the U.S. should focus on delivering practical benefits that directly improve the lives of people in the Global South. By aligning its development assistance with the priorities of recipient countries, the U.S. can bolster its influence and protect its strategic interests against China’s growing dominance.

Anita R Kellogg is an assistant professor of National Resource Studies at the Eisenhower School of the National Defense University. She is also the host of “Kellogg’s Global Politics” podcast. The opinions expressed in this article are the author's own and do not reflect the official policy or position of the National Defense University, the Department of Defense, or the U.S. government.

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