Enter the Dragon, Softly: Chinese Aid in South, Southeast and Central Asia

Abstract

Unlike its capital outlays in Africa, Chinese Aid in Southeast, South and Central Asia is considerably smaller despite an increasing trend in regional trade and investments. Also, extraction of natural resources does not seem to be the paramount logic for trade and investment decisions. Rather, Chinese financial presence in the Asian region can best be characterized by “softness.” In this paper, I make early explorations into the “soft power” thesis as a strategic component of Chinese trade and investment patterns, - one that is premised on establishing harmonious and stable relations between and among countries rather than on the immediate pursuit for natural resources as is evident in Africa. The exercise of soft power is crucial for China’s overall goal to “stabilize the periphery” so that it can proceed with its economic modernization program in a context of peace and stability throughout the region. Such investments can be viewed, therefore, as an exercise in soft power that is central to China’s overall foreign policy in the Asian region and seems to differentiate the patterns of Chinese overseas spending elsewhere.

Keywords: Chinese aid in Southeast Asia, Chinese aid in South Asia, Chinese aid in Central Asia, Chinese aid, Chinese soft power, Chinese overseas spending