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China's $2.1 trillion global investment push exposes Western vulnerabilities in tech and intelligence
A landmark investigation reveals how Beijing's state-backed capital has quietly infiltrated sensitive industries across the US, Europe, and beyond-raising alarms over intelligence leaks and technological dominance. New data obtained by the BBC shows China has spent over $2.1 trillion abroad since 2000, with nearly half flowing into wealthy nations under a strategy that predates its Made in China 2025 blueprint.
The insurer that spooked Washington
In 2015, a little-noticed acquisition set off a chain reaction in US national security circles. Wright USA, a niche insurer covering liability for FBI and CIA personnel, was sold to China's Fosun Group-a conglomerate with deep ties to Beijing's leadership. The deal, bankrolled by $1.2 billion in loans from four Chinese state banks (routed through the Cayman Islands), granted Fosun access to the personal details of America's intelligence operatives.
Jeff Stein, a journalist covering US intelligence, broke the story in 2016 after a tip-off. "There was nothing illegal about it," he told the BBC, "but because everything's intertwined in Beijing, you're essentially handing that data to Chinese intelligence." The revelation triggered a probe by the Committee on Foreign Investment in the US (CFIUS), culminating in Wright USA's forced resale to American owners. Sources confirm the case directly influenced the Trump administration's 2018 crackdown on foreign investments in sensitive sectors.
A global spending spree hidden in plain sight
China's overseas investment surge-$2.1 trillion since 2000, split evenly between developing and advanced economies-was long underestimated. Research lab AidData, which tracked the flows over four years with 120 researchers, found that wealthy nations like the US, UK, and Germany became prime targets. "We assumed China's money was going to developing countries," said AidData's Brad Parks. "Instead, hundreds of billions flowed into the West under our noses."
The strategy aligns with Beijing's Made in China 2025 plan, which aimed to dominate 10 high-tech sectors, from semiconductors to electric vehicles. While China later dropped public references to the initiative amid global backlash, experts say it remains active. "The mother of all plans is the 15th Five-Year Plan," noted Victor Shih of UC San Diego's 21st Century China Centre, pointing to Beijing's push for "high-level scientific self-reliance" by 2030.
"China has a financial system the world has never seen. The government controls interest rates and directs credit-something no other country could sustain."
Victor Shih, Director, 21st Century China Centre
Europe's wake-up call: The Netherlands and Nexperia
Europe's belated response to China's investment offensive is epitomized by the case of Nexperia, a Dutch semiconductor firm. In 2017, Chinese state banks funneled $800 million to a consortium to acquire Nexperia, which later passed to Wingtech, another Chinese company. By 2023, Dutch authorities intervened, severing Nexperia's Dutch operations from its Chinese parent over fears of technology transfer.
"The Netherlands has always thrived on open trade," said Xiaoxue Martin of the Clingendael Institute. "But geopolitics now demands investment screening." Nexperia confirmed its Chinese arm had "stopped operating within [its] governance framework," ignoring corporate instructions. The Dutch government's move-unprecedented for its assertiveness-signaled a shift from economic openness to strategic defense.
Legal but contentious
While China's investments often comply with local laws, critics argue they exploit loopholes, using shell companies and offshore routing to obscure state involvement. The Chinese embassy in London defended the practice, stating: "Chinese companies comply with local regulations and contribute to economic growth." Yet AidData's data shows a pattern: state-backed capital flowing into sectors flagged in Made in China 2025, from UK chipmakers to German robotics firms.
From defense to offense: The West's counterplay
The Wright USA and Nexperia cases exemplify how Western nations, initially caught off-guard, are now tightening scrutiny. The US, UK, and EU have expanded investment-screening mechanisms, targeting sectors like AI, quantum computing, and telecommunications. "China is no longer the follower-it's the pacesetter," said Parks. "But the G7 is moving from defense to offense."
Yet overreaction risks painting all Chinese firms as threats, warned Martin: "Most private companies just want to operate normally. The danger is treating them as a monolith out to undermine the West." As Beijing accelerates its drive for tech self-sufficiency, the next lap of this economic rivalry hinges on balancing openness with security-a tightrope the West is still learning to walk.
