Over the past two decades, Chinese foreign aid has been deployed in Southeast Asia through several hundred projects. To shed light on this phenomenon, this paper examines its scale within the Association of Southeast Asian Nations (ASEAN) and among its member states. After long years of focusing on the African continent, the dynamics of China’s global expansion of foreign assistance have placed Asia at the forefront of Beijing’s priorities with the Belt and Road Initiative. Nevertheless, in Southeast Asia, traditional donors (Europe, the United States and Japan) have remained more generous, albeit increasingly less politically significant, until the demise of the United States Agency for International Development in 2025. How should Indo-Pacific partners operate strategically in this sudden vacuum? The European Union (EU) can appear on the horizon if it demonstrates the success/reality of the cooperation it is capable of. Aid can be a good area in which to illustrate cooperation in the Indo-Pacific. Also, the EU can help to lend credibility to and support ASEAN for the benefit of its citizens.
Introduction
According to recent annual surveys conducted in Singapore by the ISEAS – Yusof Ishak Institute, China is viewed by Southeast Asian leaders, specialised journalists, and businesspeople as the most influential political and economic power in the region.[1] No country is left out and areas previously considered peripheral to Southeast Asia’s states have been heavily invested in by China since 2000.[2] The perception of its importance far exceeds that of the United States (US), Japan and the European Union (EU), and is widening year on year. It seems firmly established even though, on the one hand, the United States as well as Europe as a whole remains economically more financially involved than China.[3]
On the other hand, Japan and the EU have been seen as the two most reliable powers and are, in a sense, “powers of recourse”, perceived as more disinterested[4] but also because they appear capable of remaining outside the US-China rivalry, from which all states in the region pursuing a hedging strategy are trying to stay out of.[5] In a nutshell, China’s position in Southeast Asia is thus not secure, neither straightforward. Nevertheless, at least two elements come into the picture: firstly, the fact that the US has long been preferred over China[6] has changed with Donald J. Trump’s return to power in January 2025. Secondly, the diversity of Association of Southeast Asian Nations (ASEAN) member states makes it difficult to view the region as a whole, as the details of their respective (and mobile) positions in the international relations system show.[7]
The discrepancy between perceptions, symbolic power and objective conditions indicates scope for manoeuvre for European cooperation. This chapter therefore focuses on development aid to assess Chinese influence and highlight the objective importance that European cooperation may still hold in ASEAN today. And the brutal fall of the United States Agency for International Development (USAID) in 2025 should prompt the EU to increase its official development aid to support populations, particularly in the least developed parts of ASEAN, such as Cambodia, Myanmar or newly integrated Timor-Leste. Provided it takes account of the diversity of its partners and promotes tailored national approaches, as China does, Europe (and Italy)[8] can continue to have the ambition to play a role in bridging regional development gaps across Southeast Asia.
Quantifying and Mapping Chinese Aid at the ASEAN Level
The ASEAN Regional Context from Beijing’s Perspective
Widely regarded as the most influential country in the region – both economically and in political and strategic terms – China projects its financial power on Southeast Asia, that can be approached from various angles depending on:
As a result, a shift in the economic and human (population) centre of gravity from the Southeast Asian region towards China has been observed: according to original measurements by Chinese researchers based on the nightlight intensity, this phenomenon is said to have occurred at a rate of 145 meters per day over the past decade.[11]
The timeline of Chinese aid and investment into Southeast Asia shows an initial predominance of investments in the least developed countries (Cambodia, Vietnam, Laos, Myanmar), followed by a surge in financial engagement toward the southern part of the region: the major state (Indonesia) and the most developed states (Singapore, Malaysia) in the insular portion of the region then becoming the focus of Chinese policy. The dynamics of financial flows depend heavily on current Chinese strategies, like the Belt and Road Initiative (BRI), nonetheless they must also be viewed within the context of evolving bilateral relations between China and these countries. Finally, the relations are not linear and undergo shifts, ranging from broad openings (e.g., Rodrigo R. Duterte administration in the Philippines) to the fallout from internal political upheavals. For example, in Myanmar, investment peaked in 2009-2011 before the democratic transition; in Malaysia, the golden age of 2015-2017 was abruptly cut short by the political downfall of Prime Minister Najib Razak in 2018.
The Rise of Chinese Foreign Aid in Comparison: Sharpest Increase in Absolute Terms but Lesser Amount and Minimal Effort
The history of China’s foreign aid began with the founding of the People’s Republic of China (PRC) in October 1949. A pendulum swing can be observed: the first period (1950-1978) was marked by ideological objectives, where values were the primary goal and the priority was to consolidate political and diplomatic relations; from the 1980s onward, foreign aid was directed toward the economy and trade (1978-1999, and 2000-2013). This was followed by a period that was once again more political and diplomatic in nature (2014-2018), though it did not neglect its commercial aspects. Finally, in the recent period since 2019, aid has been directly integrated into the foreign policy and diplomatic strategy serving China’s ambitions.[12] The nebulous structure of the foreign-aid system has developed over time[13]. In terms of amounts disbursed, the comparison is difficult as the measure of China’s foreign aid differs from the Official Development Assistance (ODA) defined by the Organisation for Economic Cooperation and Development (OECD)’s conventional Development Assistance Committee framework.[14] However, it can be assessed that 2000 has marked the start of two decades of substantial growth of Chinese foreign aid in volume.
Between 2013 and 2018, foreign aid involved 20 regional and international multilateral agencies and benefited 122 countries[15]. In cumulative value over these six years, it amounts to ¥270 billion disbursed in the form of grants, zero-interest loans, and concessional loans (equivalent to approximately US$42 billion, compared to US$14.41 billion from 2010 to 2012, of which one-third were grants – 36 percent – at the time). According to the latest White paper,[16] the 2013-2018 period prioritised the least developed countries in Asia and Africa and the BRI. Least developed countries (LDCs) thus accounted for 45.7 percent of Chinese foreign aid. The first recipient was Africa (44.8 percent), followed by Asia (36.8 percent), Latin America and the Caribbean (7.2 percent), multinational organisations (4.2 percent), Oceania (3.7 percent), and Europe (3.3 percent). Asia appears to be catching up with Africa, which accounted for 52 percent in the previous period (30 percent for Asia).
Defined in a way that allows for comparison with the aid measured by the OECD’s Development Assistance Committee (DAC),[17] Chinese development aid increased sixfold between 2001, when it stood at less than US$1 billion, and 2019, reaching US$6.8 billion.[18] By way of comparison, in that same year, 2019, the net ODA of France and Japan stood between US$11 and US$12 billion, while that of EU institutions amounted to US$15 billion. The United Kingdom (UK) disbursed US$19 billion, Germany US$24 billion, and the US US$33 billion in official development assistance in 2019. China would rank 7th or 9th among donor countries depending on the specific definition of aid used. Its effort devoted to aid (ODA/Gross National Income, GNI) shows a much more pronounced gap: China’s aid effort is estimated to be four times smaller than that of the US, and between eight and sixteen times smaller than that of the other countries mentioned (Table 2).
Table 2 – Comparative development aid efforts (ODA or ODA-like/GNI) for DAC countries and China in 2019 (in percentage/%) (source: OECD, ODA Trends and Statistics, available online; Kitano N., Miyabayashi Y. (2020) “Estimating China’s Foreign Aid: 2019-2020 Preliminary Figures”, Japan International Cooperation Agency – Ogata Sadako Research Institute for Peace and Development, 14 December, available online).
| Germany | France | DAC average | Japan | US | China |
| 0.71 | 0.53 | 0.32 | 0.31 | 0.17 | 0.044 |
Nevertheless, Chinese aid recorded a strong growth in both bilateral and multilateral aid between 2000 and 2022. The Chinese bureaucracy implements aid primarily through MOFCOM (which manages 90 percent of the public budget at the central level; 3 percent reportedly comes from other ministries and 2 percent is related to scholarships for foreign students.[19] In 2019, nearly one-third of Chinese aid went to multilateral aid (US$1.8 billion), which has exceeded US$1 billion since 2015, the year the AIIB was established.[20] The respective shares of bilateral grants and interest-free loans (48 percent), concessional loans from the Chinese government (21 percent), and contributions to international organisations (30 percent) underscore the preeminent role of bilateral aid in the form of grants and zero-interest loans in Chinese aid
Following the initial strong focus on African states, which served as a testing ground for Chinese aid in the 1990s and 2000s,[21] Chinese foreign aid has expanded into Southeast Asia and materialised through several hundred projects over the past two decades.[22] Its interest in Asia, and Southeast Asia in particular, is also evident at the level of the China International Development Cooperation Agency (CIDCA):[23] established in 2018, the Chinese aid agency has placed at the forefront of its leadership (president, directors) individuals with backgrounds not only in economics (MOFCOM) but also in diplomacy, where key figures possess extensive experience in Asia, including Southeast Asia (Singapore).
Forms and Geographic Distribution of China’s Foreign Aid to ASEAN
Available Chinese sources (State Council Information Office, CIDCA, and so on) remain very imprecise in terms of geographic distribution. Despite not fully exhaustive, given its collaborative methodology, the US database AidData,[24] currently the most widely used in that matter, allows us to shed light on the amounts per country.
In the early 2000s, aid was most often directed not only toward the poorest countries geographically close to China but also those with close political ties (Cambodia, Myanmar) where the need for development cooperation is considerable, but mainly to Indonesia and, to a lesser extent, Vietnam. Also, it cannot be simply stated that China was less involved when significant maritime disputes are involved: Vietnam and the Philippines present respectively two opposed patterns. In the next period of time, opened by the launch of BRI in 2013, Malaysia and Laos have become important recipients while Indonesia (by far) as well as Vietnam remained first.
Between 2000 and 2017, 200 projects carried out by China have been of humanitarian type (13 percent) in response to emergency situations (95 percent), e.g., donations to aid flood victims in Vietnam and Cambodia in the early 2000s. The highest frequency of this type of Chinese aid was observed between 2005 and 2008 (38 percent).[25] This significant humanitarian component takes the form of medical aid and emergency assistance (such as the shipment of 200 sets of equipment for cataract surgery to Myanmar in 2013 or the dispatch of six medical teams to the Guido National Hospital in Timor-Leste in 2016) long before the “diplomacy of masks and vaccines” of the COVID era[26] or the dispatch of rescue teams to flood-stricken areas (along the Mekong River in Laos in 2008; in Myanmar in 2015, alongside the People’s Liberation Army, PLA; and in Malaysia in January 2015). Humanitarian aid also took the form of regular deployments of Chinese Youth Volunteers to Laos: about a dozen between 2002 and 2016, following the 2005 tsunami in Thailand, on numerous occasions to Myanmar, and to Cambodia, always under the banner of free technical assistance. It also appears as a complement to a robust and coherent health diplomacy that involved the construction of hospitals in recent years, primarily in Laos and Cambodia, but also in Indonesia for post-earthquake reconstruction in Sumatra, as well as in Timor and Myanmar (reconstruction beginning in 2012 of the hospital in Kyaukpyu and along the China-Myanmar oil and gas pipeline, by the Chinese state-owned China National Petroleum Corporation) and in the Philippines. In Laos, the construction of the Luang Prabang Hospital in the north of the country can be traced back to 2002 and China is responsible for the renovation of Mahosot General Hospital (US$59 million) and the Vientiane Military Hospital (also in 2017). Representing 26 regional projects, the construction or renovation of hospitals accounts for the largest share of aid (a quarter of the total amount) and involves MOFCOM, the Ministry of Defence, the PLA and state-owned enterprises. These factors make the contribution to healthcare a truly prominent feature of China’s aid practice over time.
Chinese foreign aid to Southeast Asia also takes the form of the provision of trucks and various equipment, Chinese language teachers, and the gift of rare books, for example in Singapore (which was removed from the AidData database in the 2021 edition).
More conventional forms of official development assistance such as debt forgiveness or rescheduling have also been documented by AidData, primarily between 2002 and 2006 for Laos, Myanmar, and Vietnam (for a total amount equivalent to US$330 million today), as well as in Indonesia. Cambodia, in turn, received aid in 2010 and 2016 (US$100 million). Beijing’s aid also takes the form of zero-interest loans or concessional loans (loans at preferential rates) to local governments and their agencies, such as the loan granted by the China Eximbank in 2011 for Vietnam’s construction of the Cat Linh–Ha Dong railway line (US$248 million) or to Laos in 2018 for electricity transmission (Banha-Sekong, US$300 million), or a loan for the reconstruction of the glass bottle factory in Thanlyin (Myanmar) in 2013, granted by China’s second-largest institutional bank, the China Development Bank.
The Scale of Chinese Aid in ASEAN
Over the past two decades, China’s rise in financial power has not been linear and ASEAN occupies an intermediate position between the developing regions of the Asia-Pacific (South Asia: India, Pakistan, and Bangladesh on one side; the Pacific on the other), characterised by much more pressing needs and resource constraints on one hand, and significant strategic challenges coupled with high economic and ecological vulnerability on the other. Following its deployment on the Africa continent,[27] China’s approach to international development cooperation towards ASEAN has experienced periods of acceleration and shifts in focus within the region, that received an average of US$600 million per year between 2000 and 2012; this figure rose to nearly US$1 billion (920 million) per year from 2013 through the end of 2017, representing a 50% increase and reaching a level close to that of the European Union (EU).
In this immediate region – a pivotal hub in globalisation and key to securing maritime trade routes and hydrocarbon transit (Myanmar) – China’s priorities have shifted significantly over the past 20 years: in the most recent period, Indonesia and Cambodia alone account for more than 70 percent of aid flows; and like Cambodia,[28] Laos has seen its share double in the distribution of Chinese aid within ASEAN. There are numerous Chinese aid projects across the region: 725 have been recorded by AidData between 2001 and 2017, with an acceleration in the second part (300 in the last five years 2013-2017). Although widely scattered, it is possible to discern spatial patterns and logics: notably, a significant focus on peripheral areas emerges, particularly in countries receiving substantial aid or those that are highly developed (north of the Red River in Vietnam, the east coast of Malaysia, Borneo, etc.) and a marked differentiation in these Chinese public financial flows between mainland Southeast Asian countries in direct territorial continuity with China and insular Southeast Asian countries, which are further from China both due to maritime separation and the historically more conflictual relations they maintain with China.
Taken as a whole, in 2020 alone, Southeast Asian countries received US$9 billion in net development aid from developed countries and multilateral agencies. In 2019, three ASEAN countries (Indonesia, Myanmar, and the Philippines) ranked among the top ten recipient countries worldwide, underscoring that this region of the world thus continues to receive significant attention from traditional development aid donors. In Cambodia, China is by far the leading partner and donor.[29]
Chinese aid figures can be compared with those of other countries so as to assess how aid serves as a channel of influence for various major powers at the regional level: in 2017, from the DAC (all member donors), ASEAN received US$8.6 billion, which is nine times more than what has been received from China. The Chinese aid to ASEAN was then lower than the net aid from the EU (institution) and its member states (US$1.351 billion) and was equivalent to the “grant” portion alone of the official development assistance provided by the US to ASEAN that same year (US$975 million). However, it exceeded the grant portion of Japanese aid (US$651 million). Noticeably, the EU also provided US$524 million net to China that same year. By way of comparison of the respective regional focuses: over the past decade, Europe allocated an average of only 13 percent of its development aid to Asia to ASEAN, compared to approximately 30 percent for Japan.
In 2021, the distribution of the foreign aid from China (ODA-like) and from the DAC to Southeast Asia was as reproduced in Table 3.
Table 3 – China’s Aid to Southeast Asia in comparison with traditional donors, Year 2021, in million US$ (source: AidData (2023); US State Department (2026); DAC (2025).
| 2021 | China | US | USAID | Other leading donors |
| Cambodia | 128.1 | 116 | 102.5 | Japan: 485 |
| Indonesia | 75.9 | 200 | 145.7 | Germany: 644
Australia: 206 |
| Laos | 125.7 | 98 | 35.7 | South Korea: 74
Japan: 60 |
| Malaysia | 63.2 | 15 | 5.6 | Germany: 12
EU: 9 UK: 5.2 |
| Myanmar | 171.8 | 179 | 190.0 | Japan: 320 |
| Philippines | 205.1 | 370 | 159.0 | Japan: 1.100 |
| Thailand | 56.1 | 110 | 30.0 | Japan: 339
France 34 |
| Timor-Leste | 3.1 | 27 | 21.3 | Australia: 72.3
Japan: 19.5 |
| Vietnam | 112.4 | 190 | 134.5 | Germany: 101
South Korea 78 Australia: 65 France: 59 |
| Total | 941.4 | 1.305 | 824.3 | Australia (343.3)
EU (9) France (93) Germany (757) Japan (1.224,6) South Korea (152) UK (5.2) |
It is worth noting that, in contrast, the share of EU aid to ASEAN allocated to Vietnam was extremely high at the start of the 2010s (over 50 percent), before settling between 20 percent and 30 percent after 2015. Aid from Japan, although in smaller proportions, remains relatively high (between 16 percent and 20 percent between 2012 and 2017), which is not the case for the US (approximately 12 percent of the grant portion of US ODA).
Although still lower in amount than that of the major DAC donor countries, and very limited in terms of the effort expended (less than 0.05 percent of GNI), Chinese aid has nonetheless established itself in the development aid landscape of Southeast Asia over the decade preceding the COVID-19 crisis. It has been relatively wide-ranging – from humanitarian aid to sending teachers to debt relief – and highly uneven in volume across countries.
Finally, the chronology of the linkages between aid/loans and Foreign Direct Investment (FDI is difficult to establish, as it does not follow a single or simple pattern. Econometric results, based on African countries, have shown a correlation between high levels of Chinese public investment, poor governance quality, and high levels of Chinese aid.[30] In our view, there are in fact several typical patterns of the Aid/I relationship in ASEAN, which depend less on the quality of local governance than on the recipient country’s level of development and the nature of its political ties to China. The various field studies (case studies on Malaysia, Indonesia, Cambodia, Laos, Singapore, and the Philippines, among others) can be drawn upon to support these connections. They highlight the diversity of actors and the variation in their strategies depending not only on the central governments but also on the local authorities involved. The “tailor-made” nature of certain Chinese investments and aid projects studied in the region is reflected in a remarkable ability to adapt to local conditions and national interests, which, in some cases but not always, remained overseen from the global capital. Finally, the scope and depth of the negotiations and their outcomes are also impressive: China’s high-handed moves are often highlighted, particularly when describing the intimidation tactics it employs, especially in the maritime domain or at sea, but less often are the subtle, finely tuned adjustments it makes to its industrial economic projects to align with the needs and interests of local officials and governments. This is clearly evident, for example, in the finely differentiated and perfectly tailored strategies for accessing mines in Malaysia (CNMC Sokor Mine, Kelantan)[31] or the Philippines (e.g. nickel and gold)[32].
Not only indicative of the imposition of China’s interests through aid, the functioning of the regional cooperation system also incorporates ASEAN’s own inequality pattern, internal tensions, and domestic political dynamics. Far from being independent from the Chinese multinationals strategies and focus, the foreign aid’s system thus subtly articulates the promises of shared prosperity with local governments’ quest for legitimacy and the needs of Southeast Asian economies, while responding to the imperatives and, increasingly, the constraints of the Chinese economy and diplomacy. But this finely adjusted combination should not obscure the fact that in Southeast Asia, traditional donors (Europe, the US, Japan) remain more generous than China. But are they therefore always more politically significant than Beijing? The answer depends on the countries concerned and will depend on the policies of these traditional donors.
Europe’s Scope for Development Cooperation in Southeast Asia
An Ancient, Large and Deep Presence
Over time, the EU (including the UK until recently) has positioned itself within a vast and highly heterogeneous regional space. This is a region where the EU’s diplomacy, soft power, firms and non-governmental organisations are still well-established, even compared to China. While China is generally considered the most economically influential power in the region, its economic reach – including investment stocks and flows, as well as development aid – is less significant than that of the region’s older partners. Thus, since 2010, it has appeared only twice among the top four FDI investors. Time and again, the EU, ASEAN, the US, and Japan have held the top spots.
Table 4 – Ranking of the top three to four highest foreign investors in ASEAN, 2010-2021 (source: ASEAN Secretariat, 2023).
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 |
| EU28 | US | ASEAN | Japan | EU28 | US | EU28 | US | EU 28 | US | US | US |
| ASEAN | ASEAN | US | ASEAN | ASEAN | EU28 | ASEAN | ASEAN | Japan | Japan | ASEAN | EU27 |
| US | EU28 | Japan | US/ EU28 | US | ASEAN | Japan | China | ASEAN | ASEAN | EU27 | ASEAN |
| Japan | EU | US | Japan | China | EU 28 | Japan | China |
For the EU, the question of the relative position objectively held by its companies, businesspeople, technologies and capital is therefore not so much one of decline or retreat; and, as far as the economic front is concerned, alongside new room for manoeuvre we must also consider the objectives and strategies to be pursued. Without defining them here, one idea might be to combine this strong and solid objective presence with a clearer awareness on the part of private and public economic actors engaged on the ground that their actions carry content and implications that are far from insignificant in the current context (a message that would be relayed by the several Chambers of Commerce, trained intermediaries, etc..). But this awareness should be linked more to a common and shared objective of supporting the autonomy of the countries in the region by allowing them to keep open a safe middle ground within the US-China rivalry (which these countries are asking for), rather than to a defence of Europe’s established position – or that of certain European countries – in this region of the world (an idea that expatriates do not necessarily share themselves, nor could they usually justify, and which does not meet local expectations).
Cultivating the Image of a Power of Recourse in a Time of Uncertainty
Politically, ASEAN countries maintain ambivalent and complex relations with China, a situation the EU can use to position itself as a power of recourse. China’s growing influence is not always viewed favourably in the region: according to the latest ISEAS report,[33] 64.5 percent of those who consider China to be the most influential economic power, and 68.5 percent of those who consider China to be the most influential in the political and strategic spheres, express concern about the expansion of its influence. This concern does not extend to the EU, whose presence on the ground is neither weaker nor more discreet than China’s, without being associated with a threat of imperialism – except, in a very rhetorical and entirely sporadic manner, when it comes to protecting an economic model that is still often highly extractive in the name of resistance to neo-colonialism. Similarly, the EU cannot be accused of contributing to or even fuelling any dependence of the region’s states on it (through the debt trap, in particular). Finally, it avoids criticism in the press and among the general public regarding dubious contracts, the enrichment of corrupt elites, or depriving local workers of jobs on construction sites where, conversely, Chinese companies have relied – often to a lesser extent than has been claimed by political opponents in the host countries – on labour imported from China.
The Constant Gardener
In comparison with many Chinese companies’ local business practices and labour norms, the major industrialised European countries multinationals often appear exemplary in financial and social terms given the older social responsibility agenda as it has been included in the several EU-ASEAN countries agreements that have entered into force with Singapore (2019) and Vietnam (2020), while negotiations with Indonesia have been finalised (2025) and resumed in Thailand (2023), Philippines (2024) and Malaysia (2025). Since July 2024, the EU Directive on corporate sustainability due diligence aims to foster sustainable and responsible corporate behaviour in companies’ operations across their global value chains: this regulation allows for progress and improvement. More generally, France, Germany, the UK, the Netherlands and Italy enjoy the trust of major regional political actors and are well placed to build on this legal foundation within the context of contemporary ASEAN.
This is contingent upon taking into account local perceptions of current challenges, accurately assessing the objective reality of these concerns, and providing appropriate responses in terms of the practical interactions (economic, political, diplomatic) that have been established. Five years after COVID-19, Southeast Asia has slowly moved beyond health concerns related to the pandemic to focus on the income and socioeconomic impacts it faces, the effects of climate change, and evolving geopolitical tensions.
Indeed, unemployment and economic recession have come to the forefront in 2023 (59.5 percent, +10 points compared to 2022), followed by the effects of climate change, which saw the biggest jump compared to the previous year’s public opinion (57.1 percent, +20 points) Finally, widening socioeconomic gaps and increasing income disparities, as well as military tensions, rank third among the region’s most pressing challenges (42 percent), while terrorism comes in last place (11.3 percent).
For the EU, this return to the forefront of material and tangible concerns should pave the way for greater confidence in the relevance of its strategic positioning and the importance of its contribution to international cooperation and relations. With its recognised leadership in climate governance, a strong regional industrial and economic presence, an enviable position in terms of managing inequalities (of income and capital), and with direct investments in the region still on the rise in 2022 and 2023, the EU ticks all the boxes to present itself as a reliable power, a benchmark, and a source of support in the face of the current uncertainties and concerns shaping public opinion in Southeast Asia.
The regional integration card
Fearing that the region will become an arena for competition among major powers, with member states acting as their proxies, sentiment toward ASEAN appears to be dominated by disrepute and a decline in its standing. ASEAN’s slowness and inefficiency are singled out as incapable of addressing political and economic developments. Concerns about disunity within ASEAN are far surpassing the fear that it will not be able to recover from the pandemic. Moreover, as Thuong Le Thu has shown it very clearly, China works against ASEAN unity through a dual strategy, combining power dynamics and coercion with a charm offensive consisting of multiple incentives, primarily of an economic nature.[34] However, the slowdown of the Chinese economy since 2014 has started to be felt, as well as the emergence and subsequent intensification of US-China rivalry.
By first contributing to the recognition of ASEAN and then, to its improved functioning, the EU can, conversely, help lend credibility to and support the regional association for the benefit of its citizens. The EU might intend to re-play the international integration card that was central in the 2000-2010s, although in a non-ideological manner and for better reasons than in the past, as the EU can no longer seek to be taken as a model by ASEAN. In fact, Europe’s relative position as a normative power and as a model (or an ideal) of regional integration has been significantly altered and undermined over the course of a long decade marked by China’s phenomenal rise in the region. In 2012, the EU received the Nobel Peace Prize: this achievement paradoxically marked the beginning of a form of decline. Meanwhile, ASEAN made rapid progress during the 2010-2020 period, both in terms of institutional development and prosperity of its members – including founding members (Malaysia, Indonesia, Thailand, Singapore, and to a lesser extent, the Philippines) as well as newcomers, which experienced the highest growth rates. So, the balance of power, both economic and political, between the two regions has evolved and this must be fully acknowledged in any forthcoming cooperation process.
If the EU model’s appeal as a model of integration to be emulated has very clearly eroded, the regional integration card is still significant. The ASEM forum remains a pillar of the ASEAN-EU relationship, giving it tangible substance in a few key areas at the EU level where citizens of ASEAN countries would be given preferential treatment as members of ASEAN such as school exchanges; status of migrant workers; student mobility; press cards and journalist mobility; scientific cooperation; submission of scientific projects, all areas where the EU can offer its experience, while presenting itself as open to Southeast Asian models (often less bureaucratic and more fluid). Making this EU-ASEAN cooperation more tangible and more understandable, at least for a certain segment of the population, could constitute a short-term political objective to strengthen, in a context marked by uncertainty and fear of a “clash of titans”, its role as a power of last resort.
Conclusion
As a diverse and rapidly growing region, ASEAN has been integrated into globalisation for a long time, especially into several global value chains. The region has long offered foreign investors large prospects and opportunities in sectors such as semiconductors, the automotive industry and textiles and apparel for several decades. Aid has been part of the trade, investment and power strategies of the Indo-Pacific powers as well as China.
Since 2025, ASEAN is navigating an extremely tense geopolitical landscape, where the major US-China rivalry is playing out almost daily and where, in the event of open conflict, all countries in the region feel they would emerge as losers. However, recent trade tensions (the US-China trade war in 2018; the announcement of exorbitant tariffs in April 2025) have in turn created opportunities for the relocation and reorientation of commercial activities towards ASEAN, as direct investment from Europe, China, Japan and the US in the region continued to rise in 2024 and 2025. This is all the truer given that the COVID-19 crisis has disrupted supply chains, weakened social fabric, undermined the credibility of certain governments deemed poor managers of the health crisis, and reduced ASEAN to an ineffective and contested entity. In the meantime, a coup d’état followed by civil war in Myanmar on 1 February 2021 and Thailand’s aggression at the Cambodian frontier from July 2025 have broken the peace in the region.
From the perspective of European diplomacy, the present configuration in which China is viewed as highly influential but not necessarily welcome, would suggest focusing less on the automatic expansion of EU involvement, particularly in industrial, commercial, or financial spheres, which is already substantial in quantitative terms, and more on reflecting on Europe’s own positioning. Increasing the already well-acknowledged resource constraints in the aid sector, as in France in 2025 and 2026, in the name of sovereignty and the necessary increase in national military expenditure, should not be an option. The trust the EU enjoys in Southeast Asia gives it a certain degree of leeway, provided it understands precisely the limits – undoubtedly narrower than they were fifteen or twenty years ago – and the contours, which vary depending on the country within the zone.
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Cheng, C. (2015) “Official development finance with Chinese characteristics: development cooperation between China and Africa”, in Freeman, C.P. (eds) Handbook on China and Developing Countries, Cheltenham: Edward Elgar, 193-224.
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Fau, N., Lafaye de Micheaux, E. (eds) (2026) Mapping Chinese Investment in Southeast Asia, Springer, Singapore.
Fon, R., Alon, I. (2022) “Governance, foreign aid, and Chinese foreign direct investment”, Thunderbird International Business Review, 64(2), 179-201.
Huong, L.T. (2018) “China’s dual strategy of coercion and inducement toward ASEAN: a rapidly evolving relationship – from coercion to inducement,” The Pacific Review, 32(1), 20-36.
Kitano, N., Miyabayashi, Y. (2020) Estimating China’s Foreign Aid: 2019-2020 Preliminary Figures, Japan International Cooperation Agency – Ogata Sadako Research Institute for Peace and Development, 14 December, available online at: https://www.jica.go.jp/Resource/jica-ri/publication/other/l75nbg000019o0pq-att/Estimating_Chinas_Foreign_Aid_2019-2020.pdf, accessed 15 May 2026.
Kuik, C-C. (2024) “Explaining Hedging: The Case of Malaysian Equidistance”, Contemporary Southeast Asia, 46(1), 43-76.
Lafaye de Micheaux, E. (2019) “Political economy of China’s investment in Malaysia, 2009-2018”, Bandung Journal of Global South, 6(1), 5-49.
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Lafaye de Micheaux, E. (2026) “Types, amounts and dynamics of Chinese investment flows to Southeast Asia: a critical assessment”, in Fau, N., Lafaye de Micheaux, E. (eds) (2026), Mapping Chinese Investment in Southeast Asia, Singapore: Springer Nature.
Lin, J., Martinus, M., Fong, K., Pham, T.P.T., Aridati, I.Z., Sasitharan, G. (2026) The State of Southeast Asia: 2026 Survey Report, Singapore: ISEAS – Yusof Ishak Institute, available online at: https://www.iseas.edu.sg/wp-content/uploads/2026/03/The-State-of-Southeast-Asia-2026-Survey-Final-Single.pdf, accessed 15 May 2026.
Maude, R., Fraser, D. (2022) “Chinese diplomacy in Southeast Asia during the COVID-19 pandemic”, Asia Society, 20 July, available online at: https://asiasociety.org/policy-institute/chinese-diplomacy-southeast-asia-during-covid-19-pandemic, accessed 15 May 2026.
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Rudyak, M. (2020) Who Is Who in the Chinese Lending Institutional Landscape, Urgewald, October, available online at: https://www.urgewald.org/sites/default/files/media-files/urgewald_who_is_who.pdf, accessed 15 May 2026.
Seah, S. (several years) The State of Southeast Asia: Survey Report, ISEAS – Yusof Ishak Institute, Singapore, available online at: https://www.iseas.edu.sg/frontpage-featured/the-state-of-southeast-asia-2026-survey-report/ , accessed 15 May 2026.
Sears, C. (2019) “What counts as foreign aid: dilemmas and ways forward in measuring China’s overseas development flows”, The Professional Geographer, 71(1), 135-144.
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Waisbish, L.T. (2022) “‘It takes two to Tango’: south-south cooperation measurement politics in a multiplex world”, Global Policy, 13(3), 334-345.
Zhang, D., Smith, G. (2017) “China’s foreign aid system: structure, agencies, and identities”, Third World Quarterly, 38(10), 2330-2346.
Zhang, H. (2017) “The development and transformation of China’s”, in Remler, D., Ye, Y. (eds) Parallel Perspectives on the Global Economic Order: A U.S.-China Essay Collection, Washington, DC: CSIS Simon Chair in Political Economy and the Shanghai Institutes for International Studies, 79-83.
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[1] Seah, S. (several years) The State of Southeast Asia: Survey Report, ISEAS – Yusof Ishak Institute, Singapore, available online.
[2] This chapter draws extensively on the international research network ASEAN-China Norms which the author coordinates since 2019. In particular, tables and maps were produced and discussed by the working group of geographers (including Nathalie Fau, Manuelle Franck, Gabriel Fauveaud, and Christian Taillard), economists (Clément Séhier, Muriel Périsse, and Chiang Minhua), PhD students (Robin Laillé, Cher Hui Yun, Aymeric Mariette) and Master student (Xavier Delannay) in order to assess the extent of this trend at the regional level. See Fau, N., Lafaye de Micheaux, E. (eds) (2026) Mapping Chinese Investment in Southeast Asia, Singapore: Springer Nature; Fau, N., Lafaye de Micheaux, E. (2023) “The scale of the Dragon’s shadow: Chinese aid and investment in Southeast Asia (2000-2022)”, Moussons, 41.
[3] ASEAN Secretariat (2025) ASEAN Investment Report 2025, Jakarta, available online.
[4] However, in 2024, the ASEAN confidence in the European balancing power has suddenly withdrawn (see Seah, The State of Southeast…).
[5] Tan, S.S. (2020) “Consigned to hedge: South-East Asia and America’s ‘free and open Indo-Pacific’ strategy”, International Affairs, 96(1), 131-148; Kuik, C-C. (2024), “Explaining Hedging: The Case of Malaysian Equidistance”, Contemporary Southeast Asia, 46(1), 43-76.
[6] In 2023, the prevailing stance of regional elites suggested that if ASEAN were forced to choose, 61 percent would favour the US. Coming in second, the alternative choice of China would lose 5 percentage points from 43.0 percent in 2022 to 38.9 percent in 2023 (see Seah, The State of Southeast…).
[7] In 2024, when respondents are evaluated by nationality, the majority of respondents from Brunei, Malaysia, and Indonesia prefer China over the US.
[8] Boario, M. (2025) “Italian development cooperation in ASEAN: a strategic partnership for sustainable growth”, in Gabusi G. (eds) Indo-Pacific Outlooks, Implications for the EU-ASEAN Relationship and Italy’s Role in Southeast Asia, Torino: T.wai – Torino World Affairs Institute, 89-104, available online.
[9] Pornet, A. (2020) “Every Step Makes a Footprint: China’s Aid and Development as Incremental Policies”, in Rolland, N. (ed) An Emerging China-Centric Order: China’s Vision for a New World Order in Practice, The National Bureau of Asian Research, Special Report, n. 87, August, 101-118, available online.
[10] Lafaye de Micheaux, E. (2026) “Types, amounts and dynamics of Chinese investment flows to Southeast Asia: a critical assessment in Fau, Lafaye de Micheaux, Mapping Chinese Investment…
[11] Chen, C. (2023) “Night skies illuminate Southeast Asian economic shift towards China” South China Morning Post, 29 June, available online.
[12] Lafaye de Micheaux, E. (2023) “L’aide chinoise au développement en Asie du Sud-Est”, Moussons, 41(1), 27-61.
[13] Zhang, D., Smith, G. (2017) “China’s foreign aid system: structure, agencies, and identities”, Third World Quarterly, 38(10), 2330-2346; Zhang, H. (2017) “The development and transformation of China’s foreign aid”, in Remler, D., Ye, Y. (eds) Parallel Perspectives on the Global Economic Order: A U.S.-China Essay Collection, Washington, DC: CSIS Simon Chair in Political Economy and the Shanghai Institutes for International Studies, 79-83.
[14] Waisbish, L.T. (2022) “ ‘It takes two to Tango’: south-south cooperation measurement politics in a multiplex world”, Global Policy, 13(3), 334-345; Zhang, S.H. (2021) “China’s ‘Administrative Measures of Foreign Aid’”, 对外援助管理办法; Sears, C. (2019) What counts as foreign aid: dilemmas and ways forward in measuring China’s overseas development flow, The Professional Geographer, 71(1), 135-144; United Nations Development Programme (2019) Governance System of China’s Foreign Assistance, UNDP Issue Brief, 5, 22 October, available online.
[15] Carty, A., Gu, J. (2021) Theory and Practices in China’s Approaches to Multilateralism and Critical Reflections on the Western ‘Rules-Based International Order’, Institute of Development Studies, IDS Research Report, 85, available online.
[16] State Council Information Office, People’s Republic of China (2021) China’s International Development Cooperation in the New Era, Beijing, 10 January, available online.
[17] Total bilateral aid (grants and interest-free loans), i.e., (1) grants and interest-free loans from the Ministry of Commerce (MOFCOM); (2) grants administered by other ministries responsible for foreign aid; (3) CIDCA administrative costs after 2018; (4) scholarships provided by the Ministry of Education (MOE) to students from developing countries; (5) interest subsidies on Chinese government concessional loans (GCL); (6) a special fund of ¥2 billion established by the Chinese government in 2020 to provide anti-epidemic supplies, and interest subsidies on Chinese government concessional loans managed by the Export-Import Bank of China (China Eximbank), as well as multilateral aid (contributions to international organizations eligible for ODA).
[18] Kitano N., Miyabayashi Y. (2020) Estimating China’s Foreign Aid: 2019-2020 Preliminary Figures, Japan International Cooperation Agency – Ogata Sadako Research Institute for Peace and Development, 14 December, available online.
[19] In 2009, almost two thirds of students from Global South countries studying in China received these scholarships.
[20] The creation of the Asian Infrastructure Investment Bank (AIIB) – the multilateral development bank initiated by China, which will be the largest contributor to its capital – marked a significant shift in the scale of China’s participation in multilateral aid in 2015. China reportedly contributed US$6 billion to the AIIB’s capital in five annual installments of approximately US$1.2 billion, 85 percent of which is counted as ODA under DAC rules, which, since 2017, have classified capital contributions to the AIIB as development aid.
[21] Braütigam, D. (2009) The Dragon’s Gift: The Real Story of China in Africa, Oxford: Oxford University Press.
[22] Sun, T., Zhou, T. (2014) China’s approach to international development cooperation: a case study of its aid in Cambodia, in The Rise of Asian Emerging Providers, Agence française de développement, AFD Conferences and Seminars, 26-41.
[23] Rudyak, M. (2020) Who Is Who in the Chinese Lending Institutional Landscape, Urgewald, October, available online; Rudyak, M. (2019) “The ins and outs of China’s international development agency”, Carnegie-Tsinghua Centre for Global Policy, available online.
[24] AidData Research Lab, available online.
[25] AidData (2021) Global Chinese Development Finance Dataset, Version 2.0, available online.
[26] Maude, R., Fraser, D. (2022) “Chinese diplomacy in Southeast Asia during the COVID-19 pandemic”, Asia Society, 20 July, available online.
[27] Chen, Y., Calabrese, L., Willitts-King, B. (2021) How China’s New White Paper Defines a Decade of Development Cooperation, ODI Global, 20 January, available online; Cheng, C. (2019) “The Logic Behind China’s Foreign Aid Agency”, Carnegie-Tsinghua Centre for Global Policy, 21 May, available online; Cheng, C. (2015) “Official development finance with Chinese characteristics: development cooperation between China and Africa”, in Freeman, C.P. (eds) Handbook on China and Developing Countries, Cheltenham: Edward Elgar, 193-224; Chaponnière, J-R. (2009) “Chinese aid to Africa, origins, forms and issues”, in van Dijk, M.P. (eds) The New Presence of China in Africa, Amsterdam: Amsterdam University Press, 55-82.
[28] According to AidData, between 2000 and 2012, Cambodia reportedly received US$1.02 billion in cumulative aid from China (US$78 million per year, on average), compared to US$1.2 billion in cumulative aid between 2013 and 2017 – three times as much (US$240 million per year, on average). See also, Cambodian Rehabilitation and Development Board of the Council for the Development of Cambodia, Royal Government of Cambodia (2010) Cambodia Aid Effectiveness Report 2010, May, available online.
[29] O’Neill, D. (2014) “Playing risk: Chinese foreign direct investment in Cambodia”, Contemporary Southeast Asia, 36(2), 173-205.
[30] Fon, R., Alon, I. (2022) “Governance, foreign aid, and Chinese foreign direct investment”, Thunderbird International Business Review, 64(2), 179-201.
[31] Lafaye de Micheaux, E. (2019) “Political economy of China’s investment in Malaysia, 2009-2018”, Bandung Journal of Global South, 6(1), 5-49.
[32] Bonnet F.X. (2023) “Chinese Mining Strategies in the Philippines”, Moussons, 41.
[33] Lin, J. et al. (2026) The State of Southeast Asia: 2026 Survey Report, Singapore: ISEAS – Yusof Ishak Institute, available online.
[34] Huong, L.T. (2018) “China’s dual strategy of coercion and inducement toward ASEAN: a rapidly evolving relationship – from coercion to inducement,” The Pacific Review, 32(1): 20-36.
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