Strategic Ambiguity in Development Finance: How Developing States Leverage US‐China Rivalry

ABSTRACT

Does intensifying US‐China rivalry in development finance empower developing countries, or deepen their dependence? This article argues that it does both, through a mechanism called strategic ambiguity: the deliberate maintenance of relationships with multiple, competing creditors, maximizing access to resources while avoiding binding political commitments to any single patron. Three developments have made this strategy viable at scale: record Belt and Road Initiative engagement in 2024; the cancellation of 83% of USAID contracts in 2025; and BRICS+ expansion covering approximately 45% of the world's population. The article proposes a three‐part typology, namely, competitive hedging, issue‐selective alignment, and institutional forum shopping, and tests it against five cases using a replicable coding protocol. Strategic ambiguity generates real bargaining gains for institutionally strong, diversified states; for commodity‐dependent states in acute debt distress, it often entrenches dependence. Developing states are bending the rules of development finance, not yet rewriting them.