US faults China over opaque overseas lending, warns of emerging-market debt risks

The United States has expressed concerns over China’s opaque overseas lending practices, warning that the lack of transparency could lead to increased risks of defaults and debt restructuring in emerging markets. In its 2026 Fiscal Transparency Report, the US State Department highlighted deficiencies in China's disclosure of claims against foreign borrowers, stating that this hinders accurate risk assessments.

The report called for increased public disclosure of the terms and conditions of sovereign loans provided to foreign borrowers, including liabilities and collateralized assets. While the report did not single out China, it specifically emphasized the opacity of Beijing's overseas lending, urging the government to publish detailed information about claims held by sovereign funds, banks, and state-owned firms.

China has rejected these accusations, arguing that its financing supports infrastructure and economic development and that borrowers enter agreements voluntarily. The State Department report does not identify any specific borrower or financing arrangement affected by the alleged lack of transparency.

Brief written by urgent.news from South China Morning Post's own syndicated text. Machine-written — may contain errors; check the original before relying on it.