Beijing is renowned for its $1 trillion geo-political plan “Belt and Road Initiative” which provides loans to low-income countries, but a new study has revealed a shocking yet overlooked fact: Beijing actually provides more loans to developed countries, with the United States being the top recipient. These loans predominantly focus on key infrastructure, critical minerals, and acquisitions of high-tech assets.
From 2000 to 2023, the Chinese government has provided over $2 trillion in loans globally, with the United States receiving over $200 billion from approximately 2,500 projects. A report released on November 18 by the AidData at the College of William and Mary in Virginia, one of the oldest public universities in the United States, shed light on China’s loans to developed countries.
Brad Parks, the Executive Director of AidData, mentioned that China’s cross-border lending is “two to four times larger” than previously understood. China has provided nearly $1 trillion in loans to 72 high-income countries, a scale equivalent to the loan amounts under the Belt and Road Initiative.
Over the years, Beijing’s lending focus has shifted from building bridges and railways to other sectors. According to the research, the proportion of loans provided by China to overseas advanced manufacturing has increased from 46% in 2015 to 88% in 2023, aligning with the industrial policy of “Made in China 2025” announced a decade ago.
The change in lending direction is also reflected in Beijing’s loans to American corporations. Over 40% of the loan portfolios are concentrated in industries such as mining, biotechnology, and semiconductors.
Many U.S. private companies have borrowed billions of dollars from Chinese state-owned banks, including well-known entities like AT&T, Disney, BlackRock, MasterCard, American Airlines, United Airlines, Amazon, Oracle, and Ford.
According to AidData’s research, Chinese official funds have supported projects such as liquefied natural gas construction in Texas and Louisiana, data centers in Northern Virginia, water facilities in California, and interstate oil and gas pipeline projects.
Parks stated, “China’s loans to affluent countries are mostly concentrated in critical infrastructure, critical minerals, and the acquisition of high-tech assets such as semiconductor companies.”
Co-author of the report, Katherine Walsh, mentioned that China’s lending data has become increasingly opaque. AidData’s ability to access uncovered official Chinese loan agreements dramatically decreased in 2022 and 2023.
The research team at AidData pointed out that Beijing, to evade oversight, transfers funds through shell companies, sets stricter confidentiality clauses in contracts, and completes transactions through non-Chinese entities.
The research team reviewed over 246,000 sources, including public documents from stock exchanges and financial regulatory agencies, as well as documents from international organizations like the World Bank and International Monetary Fund. This extensive work, conducted by dozens of researchers over three months, ensured that most data points had at least one official source supporting them.
On the day of AidData’s report release, the U.S.-China Economic and Security Review Commission, comprised of members from both parties, submitted its annual report to Congress, highlighting that “China’s overseas investments have long been a strategic and directly effective tool to enhance its domestic industrial capabilities and narrow the technological gap between China and the forefront of the world.”