Who He used to warn others all the time not to trust the loans they get from Chinese government banks, now he himself is reaping the benefits by becoming a ‘friend’. In other words, there is a huge difference between his words and actions.
We are talking about America. For years he has been explaining to the world that China’s loans trap developing countries in a debt trap and help them become superpowers. But now a new report has revealed that you will be stunned to know.
Actually, till now we thought that poor Pakistan is the biggest debtor of China, but the new reality is something else. The United States of America is the biggest debtor till date. American companies and projects have received loans of more than $200 billion from Chinese government banks in the last 25 years.
China’s state banks have extended more than $2.2 trillion in loans and grants around the world from 2000 to 2023, more than double earlier estimates, according to a report by AidData, a research lab at the College of William & Mary in Virginia. Of this, America remains the largest recipient. Many of these loans were kept secret because the money did not go directly from China to the US, but was routed through shell companies in the Cayman Islands, Bermuda, Delaware and other tax havens, obscuring the source.
The most worrying thing in EdData’s research is that in exchange for most of these loans, Chinese companies acquired stakes in American businesses. In many cases these companies were involved with national security and technology critical to the US – such as robotics manufacturers, semiconductor companies, and biotech firms. The report finds that China’s credit network is much more extensive and sophisticated than previously thought. This loan network is not limited only to developing countries, but also extends to rich countries like Britain, Germany, Australia, Netherlands and American allies.
After the report came out, former White House investment advisor William Henagan said that while the rest of the world was playing checkers, China was playing chess. Expressing concern, he said that these hidden loans are giving China the power to capture important technologies. He further said that future wars will depend on who controls the essential products that run the economy.
According to AidData, most of the loans to wealthy countries focused on critical minerals and high-tech assets, such as rare earths and semiconductors needed for fighter aircraft, submarines, radar systems, precision missiles and telecommunications networks. Brad Parks, executive director of AidData, said both the Trump and Biden administrations have trumpeted for more than a decade that Beijing is a predatory lender. But ironically, America itself has become the largest borrower of China’s government debt.