US Cuts Cambodia Aid as China Steps In With Similar Programs

In late February, the US government canceled two development projects in Cambodia aimed at improving early childhood literacy and nutrition. Days later, China stepped in with funding for nearly identical programs. Chinese Ambassador Wang Wenbin emphasized the importance of child development, echoing the goals of the terminated US initiatives.

While no official budget was announced by China, their aid focuses on the same areas as the now-defunct USAID efforts, according to individuals familiar with the projects. The US-funded programs were worth $40 million and concentrated on inclusive education, health, and support for vulnerable children and families.

Impact of the USAID Overhaul

The projects were part of broader USAID activities dismantled by the Trump administration, which claimed $27.7 billion in savings from eliminating thousands of aid contracts. Despite its relatively modest cost, the aid was significant for Cambodia, a country with a GDP comparable to Vermont’s.

A State Department statement reiterated that the US remains committed to promoting its interests through targeted aid but acknowledged long-standing development support in Cambodia. The canceled contracts followed an executive decision to shut down much of USAID's operations and staffing.

China Expands Influence Across the Global South

The development has raised concerns among lawmakers and policy experts who warn that China is leveraging such aid opportunities to expand its influence. China has already filled funding gaps in other regions, including de-mining efforts in Cambodia, early childhood projects in Rwanda, and development support in Nepal.

Will Parks, UNICEF’s Cambodia representative, confirmed that the organization partnered with China in 2024 for child development projects. Cambodian officials also stated they actively seek alternative partnerships if any donor withdraws.

Strategic Stakes in Southeast Asia

The US has spent over $1 billion in Cambodia since the 1990s, often competing with China's growing presence. Despite strained relations over military cooperation at Cambodia’s Ream Naval Base, the US recently gained permission to dock a warship there, signaling potential for renewed defense ties.

Still, experts argue that cutting aid programs gives China a soft power advantage. Charles Kenny of the Center for Global Development noted that minimal Chinese funding can yield significant diplomatic returns when it replaces high-profile US projects.

Policy and Security Implications

The cancellation has sparked debate over the broader implications of dismantling foreign assistance. Former USAID official Diana Putman stressed that aid budgets have historically empowered US diplomats by giving them leverage in foreign policy discussions.

China’s Foreign Ministry emphasized its aid policy of non-interference and sustainable cooperation under South-South frameworks. Meanwhile, US officials have downplayed concerns about China's role, even as observers point to a growing vacuum in US influence across developing regions.

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