China‘s Overseas Lending Shifts Focus, with US as Top Beneficiary
A new study reveals the united States has become the largest recipient of Chinese lending globally, as Beijing increasingly directs its financial support towards higher-income nations. the research, published Tuesday by AidData, a research lab at William & Mary, tracked china’s lending and grant-giving activities from 2000 to 2023, totaling $2.2 trillion across 200 countries.
The report indicates a significant shift in China’s lending priorities. While historically focused on developing nations through initiatives like the Belt and Road Initiative, lending to low and lower-middle income countries has plummeted from 88% in 2000 to just 12% in 2023. Conversely, lending to upper-middle and high-income countries has surged, reaching 76% in 2023, up from 24% in 2000.
The United States received over $200 billion in official sector credit from China, financing nearly 2,500 projects and activities.These investments span various sectors, including energy infrastructure like liquefied natural gas projects in Texas and Louisiana, data centers in Northern Virginia, and airport terminals in New York and Los Angeles. Chinese funding also supports pipelines such as the Matterhorn Express Natural Gas pipeline and the Dakota Access Oil pipeline.
“Much of the lending to wealthy countries is focused on critical infrastructure, critical minerals and the acquisition of high-tech assets like semiconductor companies,” explained Brad Parks, AidData’s executive director.
The study highlights Chinese investment in high-tech acquisitions and credit facilities extended to major Fortune 500 companies, including Amazon, AT&T, Verizon, Tesla, General Motors, Ford, Boeing, and Disney.
Pakistan ranks as the fifth largest recipient of Chinese lending, receiving $74 billion during the study period. Other significant recipients include the United Kingdom ($60 billion) and the European Union ($161 billion).
AidData estimates China’s overseas lending portfolio to be two to four times larger than previously thought, solidifying its position as the world’s largest official creditor. The report also notes a reduction in Chinese lending specifically earmarked for infrastructure projects in the “Global South” under the Belt and Road Initiative, reflecting the broader shift in lending strategy.
