US warned others not to trust China loans. It’s now the biggest recipient

ASSOCIATED PRESS

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For years, Washington has been warning others not to trust loans from Chinese state banks fuelling its rise as a superpower.

But a new report reveals an ironic twist: The United States is the biggest recipient of all — by far. And the security and technology implications have yet to be fully understood.

China's state lenders have funnelled $200 billion into US 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.

More alarming, much of the lending was to help Chinese companies buy stakes in US businesses, many tied to critical technology and national security, including a robotics maker, a semiconductor company and a biotech firm.

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 UK, Germany, Australia, the Netherlands and other US allies.

“China was playing chess while the rest of us were playing checkers,” said former White House investment adviser William Henagan.