How has it become the largest financier of development in South-East Asia?

The Louie Research Institute concluded that China is the largest financier of development in Southeast Asia, but faces increasing competition for influence over the region.

The South East Asia Aid Map, released by the Australian Institute on Sunday, showed the region received $28 billion a year in official development funding between 2015 and 2021, with $5.5 billion coming annually from China, the world’s second largest economy.

However, financial aid from Beijing has continued to shrink in recent years, with regional countries such as Japan and South Korea boosting funding.

China’s funding focuses on neighbouring countries such as Laos and Cambodia, as well as Indonesia, Southeast Asia’s largest economy, according to the Louie Institute.

Beijing also focuses on infrastructure projects and is the sector’s largest financier.

“Increasing geostrategic tensions between China and Western governments have increased the focus on using development finance, especially in infrastructure, as a means of competing for influence,” said Roland Rajah, the institute’s chief economist.