Recent evidence shows an increase in sovereign debt from China to emerging and low-income developing countries. Chinese lending contracts have stringent confidentiality clauses that restrict the borrowers from reporting these contracts. The use of these type of clauses hide the true fiscal and financial conditions of a country. This paper analyzes the debt sustainability and welfare implications of such clauses in the context of a sovereign default model with asymmetric information. I find welfare loses associated with reporting these contracts for countries that have debt with China, and small welfare gains for countries that do not have these commitments. This implies that additional incentives are necessary to encourage countries to embrace transparency initiatives.