Aid coordination through competition? Unintended consequences of China–Japan rivalry in foreign aid policy in Asia

Abstract

Abstract The power struggle between China and Japan in Asia continues, with their political confrontations extending to foreign aid rivalry. While Japan used to dominate in foreign aid in the region, China has overtaken it with its infrastructure assistance. No formal regional aid and development framework has yet been developed here. However, this article argues that unintentional donor coordination between China and Japan has been realized. The aid provided by the two does not overlap as each country tends to focus on a limited number of recipients, and a natural division of labor originates. Why has their rivalry resulted in aid coordination? This article answers the question by examining the behaviors of Japanese and Chinese aid and finding that, ironically, it is their shared interest in economic infrastructure aid that creates such a situation.