China spends big to win friends and influence across East Asia

Infrastructure investment dwarfed other arms of Chinese public diplomacy over the period, according to US research lab report

By BLOOMBERG

SINGAPORE • China spent more than US$48 billion (RM192 billion) across East Asia and the Pacific between 2000 and 2016 to reward countries that consume its products and support its foreign policy positions, a new report has found.

Infrastructure investment dwarfed other arms of Chinese public diplomacy over the period, according to a study by US research lab AidData released yesterday, totalling US$48.5 billion, with a further US$273 million spent on humanitarian aid, US$613 million on direct budget support and US$90 million on debt relief.

China’s end game was clear, the report found, rewarding “countries that consume more of its products, open market opportunities for Chinese firms, sway natural resource ‘gatekeepers’, legitimise its maritime and territorial claims and secure support for its foreign policy positions in the United Nations and other international forums”.

The net result has been largely positive, but with some caveats, said Samantha Custer, AidData’s director of policy analysis, with leaders across the region viewing China as a valuable source of ready capital, and people on the ground more aware of Beijing’s influence.

“A number of factors could threaten these gains,” said Custer. “Disputes in the South China Sea, the perception that China does not always follow through on its infrastructure promises, and the spectre of indebtedness as countries struggle to repay mounting debts to Beijing.”

Keen to assuage fears that it posed a threat, the report also found a dramatic increase in efforts to create an alternative narrative of China as a “peaceful, interesting and reliable neighbour”.

Beijing had come to rely on a range of other public diplomacy tools to enhance its image across the region, the report found.

Between 2000 and 2018 there was a 115% increase in sister city partnerships, while Beijing had opened more than 500 new Confucius Institutes, its signature cultural diplomacy programme, the report said.

Within the region, Japan, South Korea and Australia attracted the highest volume and most diverse set of “inbound Chinese public diplomacy activities in the shape of sister cities, Confucius Institutes, and official visits”, the report said.

“Beijing’s intense focus on courting political and business elites, as well as its emphasis on financial diplomacy, could increase the risk of undue influence with leaders willing to exchange favours for economic gain,” Custer said.