The USNS Safeguard sits anchored in Philippines as U.S. and Japan conduct military raids near disputed islands of South China Sea (Photographer: Sanjit Das/Bloomberg)

China Spends Big to Win Friends and Influence Across East Asia

(Bloomberg) -- China spent more than $48 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 U.S. research lab AidData released Wednesday, totaling $48.5 billion, with a further $273 million spent on humanitarian aid, $613 million on direct budget support and $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,’ legitimize 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 specter of indebtedness as countries struggle to repay mounting debts to Beijing.”

‘Peaceful’ Neighbor

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 neighbor.”

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 percent increase in sister city partnerships, while Beijing had opened more than 500 new Confucius Institutes, its signature cultural diplomacy program, 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 favors for economic gain,” Custer said.

©2018 Bloomberg L.P.