Foreign aid has long been a way for the United States and China to gain soft power and influence—providing public services in low-income countries that help them tackle poverty and disease, and engaging with people to build cooperation over the long run.
For decades, the two countries had adopted separate international aid strategies. But the Trump administration has dismantled much of the United States' traditional foreign aid systems and is charting a new path, while China has also been adjusting its approach—stepping up visible contributions to global institutions while scaling back some of the large infrastructure projects that once defined its strategy.
The result is a moment of convergence and competition: the U.S. is moving toward a more transactional model long associated with Beijing, and China is positioning itself to become a bigger presence in global health and development.
The three phases of Chinese aid
China's post-World War II foreign aid strategy goes back to the 1950s when it supported the emerging communist states North Korea and Vietnam. In those days, China itself was receiving aid from the Soviet Union, says Carrie Dolan, an expert on Chinese health aid at the College of William and Mary.
"Phase one was this anti-imperialism solidarity," Dolan says. Then, in the 1990s, China shifted.
"Phase two, we saw aid supporting Chinese development," says Dolan. China framed its foreign aid as mutually beneficial with countries in the global south, promoting economic cooperation and increasing trade.
In the 2010s, with Xi Jinping's rise to power, China sought global leadership and competition with the U.S., says Dolan.
"And then phase three, we're really seeing them transition to this soft power, great power competition."
The way China has given out aid in this third phase has largely been through bilateral agreements like the Belt and Road Initiative, according to Yanzhong Huang, a global health expert with the Council on Foreign Relations. That means government-to-government deals, often with large loans from China.
"[The initiative] was more focused on large scale infrastructure like ports, railways, power plants, financed primarily through the bilateral loans to build physical connectivity and secure economic returns for China," Huang says.
Until recently, China's methods stood in contrast with the U.S. on various levels, according to Samuel Brazys, professor of international development at University College Dublin.
China preferred working directly with governments, while the U.S. spent tens of billions of dollars funding aid groups and international organizations like the United Nations to tackle issues like poverty and disease.
U.S. foreign aid grants, Brazys says, also tended to focus on long-term solutions and came with conditions for governments, such as improving human rights, democracy and corruption. China generally did not impose restrictions on its aid.
China has been adjusting its strategy recently
China's foreign aid was subject to lots of criticism, including from the U.S. and recipient countries, according to Huang.
Dolan's research in Kenya and Sierra Leone on the efficacy of Chinese aid showed mixed reactions from local medical officials, aid and health workers. While her studies showed people appreciated Chinese aid, they were also concerned that China wasn't always considering local needs, and that it didn't put resources into preserving the longevity of its projects.
"We would see China buy MRI machines, and then they come in, and then they install MRI machines," Dolan says, but once the machines broke down over time, there was no system in place to get them fixed.
For instance, Dolan says, she was in what was once a state-of-the-art hospital financed by China in Kenya. Now she says, weeds were growing through the floor.
Dolan says many people also felt that the large loans from China were predatory and made countries economically vulnerable. There were also suspicions that China's economic interest was the true motivation behind the aid. Ultimately, Dolan and Huang say, this method undermined China's goal to build positive influence.
"Subordinating aid to commercial interest really eroded trust and soft power," Dolan says. "And we had really opaque bilateral negotiations that enabled corruption, really sidelining public health."
Which is why, Huang says, China, over the past 5 years, has slowly moved away from the big bilateral deals and is now funding small projects in low income countries and getting more involved with the United Nations.
In 2021, President Xi Jinping announced a new initiative—called the Global Development Initiative—modeled more closely after what the U.S. had been doing, according to Huang.
China began doing what it calls "small and beautiful" projects to address poverty and health issues.
In the past few years, it refurbished a maternity ward in Zimbabwe, sent medical equipment to Panama, and hired locals to build a bridge on the island of Kiribati.
Will China step into the US global health leadership role?
Since the Trump administration's overhaul of U.S. foreign aid, experts and lawmakers alike have voiced a common concern: U.S. pullback would give its rival China an opportunity to step up its influence.
Looking at China's moves in 2025, experts say the picture is more complicated. Jennifer Bouey, chair of the Global Health department at Georgetown University and co-author of the research project with Dolan, has looked at official documents and policy papers from China and says there's a sense of opportunity after the U.S. aid cuts.
"China is now thinking, 'Okay, now the US is retreating from the U.N., retreating from WHO. This is a time for China to build its global influence, dominating the international organizations, and at the same time to have a platform to expand its economic footprint,' " Bouey says.
In February 2025, as the Trump administration was dismantling USAID, China's aid agency said it would be doing more of the "small and beautiful'' projects. In March, when a major earthquake hit Myanmar, China pledged 137 million dollars in aid, compared to about $9 million from the U.S. In May, China announced a $500 million donation to the World Health Organization, in addition to its yearly dues.
These moves allow China to posture as the adult in the room, according to Nadege Rolland, fellow at the National Bureau of Asian Research.
"You're showing the face of a benevolent power that is responsible for mankind, basically," Rolland says. "Which aligns very well with Xi Jinping's vision for a world order that has China at the center of it."
Still, China spent about the same overall on foreign aid in 2025 as it did in previous years, says Bryan Burgess, who tracks China's aid spending at the College of William and Mary
"They're doing short term measures to win over hearts and minds, but they're not investing in the sort of infrastructure and sustainability that big diseases need to get eradicated," Burgess says.
Both he and Rolland say China won't be rushing to fill the gap left by the U.S.
"I don't think it's fully ready to take that role of a global health provider, and it's probably started feeling the stones. That's a Chinese expression to say, 'we're advancing very prudently in that direction.'" Rolland says.
However, it's clear that China will try to increase its influence through foreign aid, as the U.S presence appears to wane, she says.
The U.S. is changing its model too, and it rings a bell for some
Last fall, U.S. Secretary of State Marco Rubio announced the new America First Global Health Strategy, claiming the old foreign aid model led to a waste of taxpayer money and wasn't furthering U.S. political and economic interests.
Instead, the State Department says it has made over a dozen bilateral agreements with low income countries. The administration says it's hoping to create access to resources like minerals in Africa and opportunities for American businesses.
"[The U.S.] seems to be converging toward the Chinese preexisting model, at the time when China seems to be moving away from its preexisting approach," Huang says.
Huang and Dolan say by commercializing aid, the U.S. could face the same pitfalls that China did.
"I think that the United States should focus on actual health and resist trying to over-commercialize," says Dolan. "Because this commerce first approach, it only compromises health outcomes."
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