For years, Washington has been warning others not to trust loans from Chinese state banks fueling its rise as a superpower, but a new report reveals an ironic twist: The United States is the biggest recipient of all — by far.
“China was playing chess while the rest of us were playing checkers,” said former White House investment adviser William Henagan, who worries the hidden lending has given China a chokehold on technologies. “Wars will be won or lost based on whether you can control products critical to running an economy.”
China’s state lenders have funneled $200 billion into U.S. businesses for a quarter of a century, but many of the loans have been kept secret because the money was first routed through shell companies in the Cayman Islands, Bermuda, Delaware and elsewhere that helped obscure their origins, according to AidData, a research lab at the College of William & Mary in Virginia.
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“There is a complete lack of transparency that speaks to the lengths to which China goes, whether through shell companies or confidentiality agreements or redactions, to make it extremely difficult to come up with this full picture,” said Scott Nathan, the former head of the U.S. International Development Finance Corp., an agency set up in the first Trump term to invest in foreign projects deemed in the U.S. national interest.
The report found a far more widespread and sophisticated lending network than previously thought — a web of financial obligations extending beyond developing countries to rich ones, including the U.K., Germany, Australia, the Netherlands and other U.S. allies.
“The U.S., under both (former President Joe) Biden and Trump, have been beating this drum for more than a decade that Beijing is a predatory lender,” said Brad Parks, executive director of AidData. “The irony is very rich.”
Until now, a full accounting of China’s state lending has never been published because much of the financing is buried beneath layers of secrecy, masked by Western-sounding shell companies and mislabeled by international databases as ordinary private financing.
The revelations about China’s secretive lending to U.S. businesses underscore a striking irony in global finance and geopolitics. While the United States has long criticized China as a predatory lender, it has simultaneously become one of the largest recipients of Chinese state-backed loans. This contradiction highlights a tension between public rhetoric and private economic interests, reflecting the complexity of international relations where national security concerns intersect with market incentives.
The use of shell companies and opaque financial structures to obscure these transactions emphasizes the broader challenges of transparency and accountability in global finance. It also illustrates how powerful nations can inadvertently expose themselves to strategic vulnerabilities while pursuing short-term economic gains.
The U.S. criticism of China may thus appear hypocritical, revealing the difficulty of maintaining a principled stance in a highly interconnected, competitive global economy. Going forward, this situation underscores the need for stronger oversight, transparency, and alignment between national security priorities and financial policy.