World Bank To Aid China With $1B Low-Interest Loans

The World Bank will be implementing a $1- to $1.5-billion annual lending plan to China. This program will last over a few years until 2025. CNBC noted that this comes despite objections from the United States.

This plan is in line with the World Bank’s “broad support” for China’s structural and environmental reforms. The organization clarified that the lending would decline over the country partnership framework program. This is in light of the agreed-upon reforms which implemented the $13 billion capital increase back in 2018.

In the fiscal year 2019, China received a loan of $1.3 billion, which shows a decrease from the $2.4-billion loan it received in 2017. With this, the new plan will implement a gradual decline in the amount it will lend to the country. Moreover, the plan noted that “lending levels may fluctuate up and down from year to year due to normal pipeline management based on project readiness.”

CNBC noted that Beijing requested this sustained support from the bank’s International Bank for Reconstruction and Development division.

World Bank To Aid China

U.S. Treasury Secretary Steven Mnuchin pointed out that China does not need the aid as it is wealthy enough to support itself. Moreover, the treasurer said that the country is already doing its own lending to poor countries through the Belt and Road infrastructure drive. These examples aim to show that the country has the funds, which means that it does not need the World Bank’s help.

Senate Finance Committee Chairmen Charles Grassley supported Mnuchin’s arguments saying that the World Bank should not be using American tax dollars to lend to “wealthy countries that violate the human rights of their citizens.” This statement refers to the detention camps for Muslim Uighurs in China.

Grassley also referred to China as a country that “attempt to dominate weaker countries either militarily or economically.”