World Bank approves $1 billion-plus annual China lending plan despite US objections
The World Bank’s board on Thursday released a new plan to provide China with up to $1.5 billion in low-interest loans per year through mid-2025, despite strong objection from U.S. officials and lawmakers.
At a House Financial Services Committee hearing, U.S. Treasury Secretary Steven Mnuchin said that the Treasury’s representative on the board has expressed the Trump administration’s desire for the World Bank to “graduate” China from the loan program, which is designed for low- and middle-income countries, CNBC reports.
The bank’s new plan, though, calls to “gradually decline” its lending to China. The past five years the World Bank has lent China an average of $1.8 billion per fiscal year. In the 2019 fiscal year, the bank loaned China $1.3 billion, which was down from roughly $2.4 billion during the 2017 fiscal year.
“Lending levels may fluctuate up and down from year to year due to normal pipeline management based on project readiness,” the bank said in the plan.
Senate Finance Committee Chairman Chuck Grassley (R-Iowa) spoke out against the loans to China during remarks on the Senate floor Thursday.
“China is now the world’s second largest economy and its per capita income is well above the level at which countries are supposed to ‘graduate’ from needing World Bank assistance,” he said.
Grassley also pointed to alleged human rights abuses in China involving minority Muslim Uighurs.
“The World Bank, using American tax dollars, should not be lending to wealthy countries that violate the human rights of their citizens and attempt to dominate weaker countries either militarily or economically,” he said.
Last month, Rep. Anthony Gonzalez (R-Ohio) introduced a bill that would curb World Bank funding to China, saying, at the time, “The United States cannot afford to give the World Bank a blank check as long as they continue to make cloudy investments and misuse taxpayer dollars by providing loans to countries that do not and should not qualify for them.”
“I cannot stand by and allow my constituents’ taxpayer money to go to China while they continue to abuse this nation and suppress democracy as we have seen in Hong Kong,” he added.
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