While the term “small and beautiful” initially emerged in the context of the Belt and Road Initiative (BRI), it is increasingly reshaping China’s foreign aid agenda. On February 18, 2025, the China International Development Cooperation Agency (CIDCA) released a report on “‘Small and Beautiful’ Projects” in China’s foreign cooperation. This marks a significant shift from decades of prioritizing large-scale projects and substantial loans to a focus on sustainable and community-based projects.
What are the motivations behind this recalibration and its broader implications for the global aid landscape?
For decades, China’s foreign aid philosophy revolved around large-scale infrastructure, state-to-state loans, and top-down partnerships. While this approach bolstered Beijing’s geopolitical influence, it has drawn criticism for exacerbating debt risks, enabling elite capture, prioritizing self-interest, and neglecting sustainability. The recent CIDCA report – the fifth report in the “International Development Cooperation: China’s Practice” series – marks the first official effort to define and promote “small and beautiful” projects within its foreign aid context. This is not merely rhetorical repackaging but a deliberate strategic shift. The previous four reports, covering emergency humanitarian assistance, COVID-19 assistance, project evaluation system, and poverty reduction, had already laid the groundwork for this emerging shift. Now, China is signaling that “small and beautiful” projects are becoming the cornerstone of its international development cooperation.
However, the essence of “small and beautiful” is not entirely new. Instead, it represents the institutionalization of local experiences in foreign aid into a national strategy. Two examples given in the CIDCA report are noteworthy: “Heart-to-Heart Yunnan Tour” (心联通云南行) and “Love Journey” (爱心行). Both projects were initiated at the local level, with the support of local governments, rather than by Beijing. “Heart-to Heart Yunnan Tour” encompasses a wide range of “small and beautiful” projects in different fields such as infrastructure, industrial development, agriculture technology, culture and education in South and Southeast Asia. It was first launched by the Yunnan Provincial People’s Association for Friendship with Foreign Countries with backing from the Yunnan provincial government. The “Love Journey” involves cooperation between medical institutions in Shandong Province and recipient countries like Ghana, Tanzania, and Niger. These programs are neither fully top-down nor purely societal. They blend provincial government support, corporate sponsorships, and participation by social organization.
By legitimizing such local experiences, Beijing achieves two goals. First, it shares the financial burdens through diversified participation – one key principle of “small and beautiful” projects. Against the backdrop of domestic economic stagnation, mobilizing ministries, local governments, private companies, social organizations, and other actors can effectively offset the fiscal strain of the central government. For example, the “Heart-to-Heart Yunnan Tour” involved 40 collaborating units, including 12 overseas business representative offices, five enterprises, five social organizations, and other professional institutions.
Second, it creates a “whole-of-society” aid ecosystem to project softer and more diffuse influence. As noted in the CIDCA report, a pattern of joint action has been developed for these projects, involving “ministries, local governments, enterprises, think tanks, universities, and international organizations.” However, this diversification also risks inconsistency. The coordination of diverse stakeholders with competing priorities can pose operational risks for China, potentially threatening project quality and coherence.
The deeper aim of “small and beautiful” lies in fostering “soft connectivity.” China’s past focus on “hard” infrastructure – dealing primarily with host governments – entangled Beijing in local politics and left it vulnerable to backlash during leadership transitions. In contrast, “small and beautiful” projects emphasize “people-centered” and “demand-driven” principles by prioritizing direct community engagement to cultivate goodwill among ordinary citizens. Under this framework, priority is given to areas directly related to people’s well-being, including poverty reduction, agriculture, health care, education, and emergency humanitarian aid, thereby aligning with local needs. The examples provided in the report demonstrate that these projects work more directly with local communities to improve livelihoods and foster the people-to-people bonds promoted by President Xi Jinping.
The strategic calculus is clear: while dams and highways bind states, clean water and vocational training bind societies. Such projects generate less debt but yield more durable influence, enabling China to position itself as a champion of “South-South cooperation” amid Western critiques of its Belt and Road Initiative.
However, Beijing faces an institutional gap. Unlike Western donors, China lacks a robust ecosystem of NGOs and development professionals to implement community-focused aid effectively. Scaling up “small and beautiful” will require forming partnership with domestic non-state actors, which poses a paradox for a state that traditionally contains civil society development.
China’s pivot could reshape development norms. By promoting “small but beautiful” projects, Beijing advocates a decentralized, low-cost aid model that offers an alternative for cash-strapped Global South states. Notably, CIDCA’s report aligns with concurrent efforts to broaden China’s financing toolkit – including the Global Development and South-South Cooperation Fund, Global Development Project Pool, and Global Development Capital Pool.
Yet the shift also reveals Beijing’s adaptability. While India, Japan, and Western rivals ramp up infrastructure financing, China is pivoting to niches where competition is thinner and political returns can be higher. On the one hand, this could foster a tacit division of labor in global aid, albeit unintentionally. On the other hand, this shift also complicates accountability. The fragmentation of funding sources across provinces, companies, and NGOs makes comprehensive tracking of China’s aid and its strategic objectives more challenging.
China’s embrace of “small and beautiful” projects represents both a strategic recalibration and smart adaptability. Beijing is responding to past international criticism and the current domestic economic slowdown while offering a cost-effective tool to deepen influence in the Global South. The key challenge lies in its practical implementation: Can Beijing balance decentralized aid implementation with quality control? How will it reconcile the needs for an active civil society in foreign aid and its concerns of a flourishing non-state sector?
Amid intensifying geopolitical competition, China’s strategic reorientation in foreign aid – when contrasted with the Trump administration’s cutoff of nearly all U.S. development assistance – enables Beijing to claim the moral high ground through direct community-level engagement. Although it remains to be seen how this more fragmented approach will affect the global aid regime, the move underscores China’s pragmatic agility. By blending local experiences with global ambition, Beijing is crafting a development cooperation model that rivals can neither fully emulate nor easily dismiss.