China's Global Investments and Loans Raise Concerns

A Chinese firm, Fosun Group, acquired an insurance company that provided liability insurance to FBI and CIA agents in 2015, raising concerns about the potential access of Chinese entities to sensitive US intelligence information. The acquisition was financed by four Chinese state banks through a $1.2 billion loan routed via the Cayman Islands. This deal is part of a larger trend of Chinese state-backed investments in wealthy countries, with Beijing spending $2.1 trillion outside its borders since 2000. The investments are often strategic, targeting key technologies and industries outlined in China's 'Made in China 2025' plan. The US and other major economies have since tightened their investment screening mechanisms in response to such deals.

A new report by AidData, a research lab at William & Mary university, has found that the United States has been the largest recipient of Chinese loans over the past two decades, receiving over $200 billion for nearly 2,500 projects. The report reveals that China's overseas lending has shifted from focusing on developing countries to upper-middle income and high-income countries, with a significant portion going to critical infrastructure, minerals, and high-tech assets. The US, UK, and EU member states have been among the top recipients, with Chinese state-owned entities financing various projects, including LNG projects, energy pipelines, and high-tech company acquisitions. The report suggests that China's lending practices are increasingly aligned with its national security and economic statecraft goals, and that its rivals, including the US, are responding by adjusting their own lending practices.

China has provided over $2.2 trillion in loans and grants globally since 2000, with the US being the largest recipient at $200 billion, despite being a developed nation. China's lending has been used to fund strategic projects and establish supply chain control, raising concerns in the West. The country's lending practices have shifted from big projects in developing countries to emergency lending and commercial lending in developed nations.

A US advisory panel has urged Congress to impose tougher sanctions on Hong Kong due to the city's erosion of autonomy and fundamental freedoms. The US-China Economic and Security Review Commission's annual report recommends scrutinizing Hong Kong's international transactions and exports, and turning an existing executive order into law to address Beijing's actions. The report criticizes Hong Kong's government for cracking down on dissidents and creating an atmosphere of repression similar to mainland China.

A US government report has found that China's 'Made in China 2025' (MIC2025) strategy has cemented its status as a global manufacturing powerhouse despite missing some goals, particularly in aviation and integrated circuits. The report evaluated China's progress across 12 strategic industries and found significant gains in manufacturing capabilities and domestic and global market share. China's share of global manufacturing rose from 25.9% in 2015 to 28.8% in 2023. The report highlights the role of state support in China's innovation and its rise up the global value chain.

A US Congressional commission has urged the establishment of a consolidated economic statecraft entity to tackle China's growing technological challenge and evasion of American export controls and sanctions. The US-China Economic and Security Review Commission (USCC) made this recommendation in its annual report, citing the current fragmented approach across multiple agencies as diluting accountability and prioritization. The call comes amid a tit-for-tat fight between Washington and Beijing over technology and critical minerals restrictions.

China has provided $2.2 trillion in loans and grants worldwide since 2000, with $1.3 trillion going to developing countries and $200 billion to the United States. The majority of China's lending has gone towards infrastructure projects such as roads, ports, and railroads. The research institute AidData found that while developing countries received significant funding, the United States was the largest single recipient of Chinese financial support.