SHIFT IN CHINA’S LENDING
Liquefied natural gas developments in Texas and Louisiana, data centres in northern Virginia, and new terminals at New York’s John F Kennedy International Airport and Los Angeles International Airport are among the critical infrastructure projects bankrolled by Chinese state-owned entities.
According to AidData, Beijing has also helped Chinese firms acquire or buy stakes in high-tech US companies and provided liquidity to a wide range of Fortune 500 companies including Amazon, Tesla and Boeing.
Brad Parks, executive director at AidData, said: “We’re talking about lending into sectors that have been designated as sensitive on national security grounds.”
These industries include artificial intelligence, defence production, quantum computing, biotechnology, robotics and semiconductors, he noted.
Parks added that Chinese state lenders often avoided scrutiny by channelling funds through offshore shell companies in jurisdictions such as Bermuda, or by routing the money through international bank syndicates.
But it is not just the US receiving Chinese loans.
China’s lending and grant giving totalled US$2.2 trillion across 200 countries in every region of the world from 2000 to 2023, said the report.
It noted that in 72 high-income countries alone, China financed nearly 10,000 projects and activities over that period, with spending approaching US$1 trillion.
“I think everyone previously assumed that China’s lending operations in wealthy industrialised countries were small and insignificant, but we discovered the opposite to be true,” said Parks, who is also a research professor at the College of William & Mary.
“The share of Beijing’s lending portfolio that supports high-income and upper middle-income countries has skyrocketed from 12 to 76 per cent.”
The study found that China’s overseas lending portfolio is far larger than previously understood. Its lending for Belt and Road infrastructure projects in the developing world makes up a surprisingly small share — just 20 per cent of the total.
