Bessent Says China’s Belt and Road Initiative Has Shifted Toward Debt Collection

U.S. Treasury Secretary Scott Bessent said China’s Belt and Road Initiative has increasingly shifted from financing infrastructure projects toward collecting debts from countries facing difficulty repaying Chinese loans.

Speaking before the House Financial Services Committee on September 15, Bessent characterized the initiative as having moved from a lending operation to what he described as a “collection operation.” His comments came during a broader hearing examining the international financial system, U.S. leadership at multilateral financial institutions, sovereign debt restructuring, and global economic imbalances.

Bessent raised concerns about the structure and transparency of some Chinese lending arrangements, arguing that undisclosed provisions can make it more difficult for heavily indebted countries to negotiate restructuring agreements. He said greater transparency is important when governments and creditors are attempting to address unsustainable sovereign debt.

Chinese Lending Practices Draw Scrutiny

The discussion followed questions from Rep. Scott Fitzgerald, R-Wis., who criticized China’s lending practices and its role in international debt restructuring.

Bessent said Chinese loans can include provisions that complicate negotiations when borrowers encounter repayment problems. He also pointed to the importance of disclosing lending terms so creditors, borrowers, and international financial institutions have a clearer picture of a country’s obligations.

Debt transparency has also been part of the broader U.S. agenda within the Group of 20. Treasury previously identified improving the global sovereign debt architecture, increasing transparency, and facilitating restructuring processes among its priorities for the 2026 G20 Finance Track.

Bessent said the issue was discussed during the G20 Finance Ministers and Central Bank Governors meeting held in Asheville, North Carolina, from August 31 through September 1. His prepared testimony said participating economies reached broad agreement on improving the global sovereign debt architecture.

According to Bessent, a debt restructuring following those discussions was expected to move forward, although he did not publicly identify the country involved or provide a timetable.

China’s Role at the IMF and World Bank

China’s relationship with major international financial institutions was another focus of the hearing.

House Financial Services Committee Chairman French Hill, R-Ark., questioned continued World Bank financing for China, pointing to the size of the Chinese economy and its position as a major international creditor.

Hill also pointed to the World Bank’s plan to phase down IBRD lending to China, with no further IBRD borrowing expected in principle by the end of the World Bank’s FY2026–31 country strategy. His broader argument was that development financing should be directed toward countries with greater need for external assistance.

The committee also examined China’s economic policies and their potential implications for the international financial system.

Bessent said the International Monetary Fund was engaged in discussions with Beijing over economic imbalances and their possible effects on global financial stability. He also said China had resisted language addressing non-market economies during recent G20 discussions in Asheville.

Belt and Road Debt Remains a Global Issue

China launched the Belt and Road Initiative in 2013 under President Xi Jinping. The program has financed ports, roads, railways, energy infrastructure, and other projects across Asia, Africa, Europe, and Latin America.

As borrowing under the initiative expanded, some participating countries encountered debt pressures and sought to renegotiate repayment terms. Those cases have fueled a wider debate over the transparency, sustainability, and restructuring of Chinese overseas lending.

Beijing has rejected accusations that the Belt and Road Initiative is designed to create “debt traps.” Chinese officials have instead described the program as a mechanism for supporting infrastructure development, trade, and economic cooperation.

India has remained outside the initiative, citing sovereignty concerns surrounding the China-Pakistan Economic Corridor, portions of which pass through territory claimed by India.

Bessent’s comments place Belt and Road lending within a broader international debate over sovereign debt transparency. As more borrowing countries seek restructuring, the terms attached to major bilateral loans and the willingness of creditors to participate in coordinated negotiations are likely to remain important issues for the IMF, World Bank, G20, and heavily indebted governments.