WASHINGTON, D.C.: A new report has exposed a striking contradiction at the heart of U.S. foreign policy messaging: while Washington has spent years urging other countries to beware of Chinese state financing, the United States itself has received more of that money than any other nation in the world, by a wide margin.

According to AidData, a research lab at the College of William & Mary, Chinese state lenders secretly funneled US$200 billion into U.S. businesses over the past 25 years. Much of the money was obscured through shell companies based in places like the Cayman Islands, Bermuda, and Delaware, masking Beijing's involvement and complicating efforts to understand the scale of its influence.

Many of the loans supported Chinese companies acquiring stakes in U.S. firms tied to sensitive technology and national security, including robotics, semiconductors, and biotechnology. The report says the lending network reaches far beyond developing nations, extending deeply into wealthy U.S. allies such as the U.K., Germany, Australia, and the Netherlands.

"China was playing chess while the rest of us were playing checkers," said former White House investment adviser William Henagan, warning that the opaque lending has given Beijing leverage over technologies critical to national power. "Wars will be won or lost based on whether you can control products critical to running an economy."

Deeper Look at China's State Money

Foreign investment remains broadly welcome in the United States, and President Donald Trump has repeatedly encouraged it. But Chinese capital has drawn heightened scrutiny as the two global powers compete over technology and influence.

The research focused specifically on deals backed by China's major state-owned banks, institutions controlled by Beijing's central government, and the Communist Party's Central Financial Commission. AidData found China lent more than $2 trillion worldwide between 2000 and 2023, doubling prior estimates. Much of the lending to wealthy countries targeted critical minerals and high-tech assets used in defense systems, telecommunications, and advanced manufacturing.

"The U.S., under both (former President Joe) Biden and Trump, has been beating this drum for more than a decade that Beijing is a predatory lender," said Brad Parks, AidData's executive director. "The irony is very rich."

Layers of Secrecy

Until now, the full extent of Chinese state lending has been challenging to trace. AidData says Chinese financing was often disguised behind Western-sounding shell companies and confidential agreements.

"There is a complete lack of transparency that speaks to the lengths to which China goes … to make it extremely difficult to come up with this full picture," said Scott Nathan, former head of the U.S. International Development Finance Corp.

The U.S. has since strengthened its oversight. The Committee on Foreign Investment in the United States (CFIUS) was expanded in 2020 to protect sensitive sectors. But China has adapted as well, opening more than 100 overseas bank branches that lend to offshore entities, further obscuring money trails.

"In places where there are more cops on the beat," Parks said, "it has found ways to work around barriers to entry."

Where the Loans Went

AidData documented Chinese state-backed financing across the United States, especially in the Northeast, the Great Lakes, the West Coast, and the Gulf of Mexico. Examples include:

2015: Chinese state banks lent $1.2 billion to help a Chinese firm buy 80 percent of U.S. insurer Ironshore. Regulators were unaware of Beijing's involvement because financing was routed through a Cayman Islands entity. The U.S. later forced divestment after finding the Chinese government could access sensitive client information.

2016: Following the publication of China's "Made in China 2025" industrial plan, the Export–Import Bank of China lent $150 million to help a Chinese company acquire a Michigan robotics equipment maker. After Beijing announced the plan, the share of loans targeting sensitive sectors such as robotics, biotech, quantum computing, and defense rose from 46 percent to 88 percent.

2017–2022: Deals involving shell companies in Delaware, the Cayman Islands, and the Netherlands were used to attempt — and sometimes succeed in — acquiring semiconductor firms in the U.S. and U.K., only for authorities later to order divestments over national-security concerns.

Following the Trail

AidData researchers traced China's hidden lending through filings and disclosures in more than 200 countries, a project that expanded rapidly once analysts realized the scale of Beijing's activity in advanced economies. The findings show a shift in the use of state financing — from development-focused loans to acquisitions that could give China control over strategic technologies.

"There's global concern that this is part of a concerted effort to gain control over economic chokepoints," said Brad Setser, an adviser to the U.S. Trade Representative. "It's important that we understand what they're doing, and they don't make it easy."