Why in the News?
Under President Trump, the U.S. withdrew from key global commitments like WHO and the Paris Agreement. Meanwhile, China is expanding influence by offering financial aid and increasing global investments.
Why has the U.S. withdrawn from key international bodies like the WHO and the Paris Agreement?
- Perceived Bias and Mismanagement: The U.S. accused the World Health Organization (WHO) of being biased towards China and mismanaging the COVID-19 pandemic response. Eg: President Trump alleged that the WHO failed to hold China accountable during the early stages of the outbreak.
- Disproportionate Financial Burden: The U.S. claimed it was contributing significantly more than other countries, creating an unfair financial burden. Eg: The U.S. contributed around 20% of the WHO’s assessed funding, while China contributed much less until recently.
- Rejection of Global Climate Commitments: The Trump administration viewed international climate agreements like the Paris Agreement as detrimental to American economic interests. Eg: The U.S. withdrew from the Paris Agreement and announced it would cease all financial commitments under the UNFCCC.
What steps has China taken to increase its global influence in response to the U.S.’s retreat?
- Increased Financial Contributions to Global Institutions: China has significantly raised its funding to international bodies like the WHO to fill the vacuum left by the U.S. Eg: After the U.S. announced its withdrawal from the WHO, China pledged an additional $500 million over five years and increased its assessed contribution from 6.5% (2015–16) to 15% (2024–25).
- Expansion of Bilateral Lending and Debt Diplomacy: China has extended massive loans to developing countries, becoming a dominant bilateral creditor globally. Eg: China’s share in global bilateral sovereign debt rose from around 1% in 2003 to 26% in 2023, making it the largest lender worldwide.
- Strategic Soft Power and Infrastructure Investments: China has expanded its Belt and Road Initiative and other overseas investments to enhance influence and dependency. Eg: China’s investments across Asia, Africa, and Latin America have increased, with more than 60% of respondents in a 2024 Pew survey acknowledging China’s economic influence in their countries.
How has China’s financial contribution to the WHO changed after the pandemic?
- Increased Assessed Contributions: China’s assessed contribution to the WHO rose from 6.5% in 2015–16 to 15% in 2024–25. This increase reflects China’s growing economic stature and its commitment to global health initiatives.
- Significant Financial Pledges: In response to the U.S. withdrawal from the WHO, China pledged an additional $500 million over five years to support the organization’s activities. This move positions China as a leading state donor and underscores its intent to enhance its influence in global health governance.
Where does China stand in terms of global bilateral debt holdings compared to the U.S.?
- China as the Leading Bilateral Creditor: As of 2023, China holds approximately 26% of the external bilateral debt of developing countries, making it the largest bilateral creditor globally. Eg: China is the primary bilateral creditor for 53 countries and ranks among the top five creditors in three-quarters of all developing nations.
- Decline in U.S. Bilateral Lending: The U.S.’s share in global bilateral debts has significantly decreased over the decades. Eg: In 1973, the U.S. held 36% of global bilateral debt, but by 2023, this share had dropped to just 4%.
- China’s Influence on Debt Repayments: China’s substantial lending has led to a significant portion of debt repayments from developing countries being directed to it. Eg: In 2025, developing countries are projected to allocate over 30% of their bilateral debt service payments to China, surpassing payments to multilateral lenders and private creditors.
What is the status of India in soft power?
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Way forward:
- Strengthen Multilateral Engagements and Global Leadership: India should actively enhance its financial and diplomatic contributions to key international bodies like WHO and climate forums to build credibility and influence, positioning itself as a responsible global leader.
- Leverage Cultural Diplomacy While Addressing Domestic Challenges: Amplify India’s soft power by promoting cultural exports and diaspora ties, while simultaneously improving governance and addressing social issues to boost its global image and rankings.
Mains PYQ:
[UPSC 2024] The USA is facing an existential threat in the form of a China, that is much more challenging than the erstwhile Soviet Union.’ Explain
Linkage: The depiction of China advancing its position while the U.S. is perceived as pulling back, creating a dynamic of increased competition and challenge between the two powers. This question presents the U.S. perspective on China as a major challenge.
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