WASHINGTON, D.C. – Today, U.S. Senator John Barrasso (R-Wyo.) led 21 senators in introducing bipartisan legislation to end lending to the Chinese Communist Party from multilateral development banks, including the World Bank and Asian Development Bank.
The World Bank and the Asian Development Bank were created to promote economic growth in developing countries and eliminate extreme poverty. Despite having access to capital and being the second-largest economy in the world, China is still receiving loans and assistance from both banks.
Since meeting the criteria for graduation from lending in 2016, the World Bank approved $9.6 billion in projects to China. The Asian Development Bank provided China with $10.6 billion in loans and $2.4 billion in non-sovereign commitments in China during that same timeframe.
“China is the world’s second-largest economy, yet it continues to profit off World Bank and Asian Development Bank loans largely funded by American taxpayers,” said Senator Barrasso. “While China obtains subsidized loans, it is engaging in predatory lending to developing countries across the world. As the largest contributor to these banks, the United States has a duty to make sure our money and resources are going to countries that need it most, not China. It’s time to stop sending Americans’ hard-earned tax dollars to the Chinese Communist Party. This legislation will put an end to lending to China and help refocus the development mission of the multilateral development banks.”
Cosponsors of this legislation include U.S Senators Joe Manchin (D-W.Va.), Chuck Grassley (R-Iowa), Cynthia Lummis (R-Wyo.), Thom Tillis (R-N.C.), Mike Lee (R-Utah), Jerry Moran (R-Kan.), Rick Scott (R-Fla.), Bill Hagerty (R-Tenn.), Eric Schmitt (R-Mo.), James Lankford (R-Okla.), Marsha Blackburn (R-Tenn.), Josh Hawley (R-Mo.), Marco Rubio (R-Fla.), Tom Cotton (R-Ark.), Mike Braun (R-Ind.), Kevin Cramer (R-N.D.), Roger Marshall (R-Kan.), Bill Cassidy (R-La.), Mike Rounds (R-S.D.), John Hoeven (R-N.D.) and Shelley Moore Capito (R-W.Va.).
Summary:
This bill requires the Secretary of Treasury to instruct the U.S. Executive Director at each of the multilateral banks to oppose any loan, extension, or technical assistance by the bank to China and to end lending to countries that exceed the criteria for graduating from lending.
The legislation creates an annual report to Congress:
• Assessing the status of China’s borrowing from the multilateral development banks,
• Describing China’s voting power, shares and representation at the banks, and
• Listing countries exceeding the graduation discussion income at each bank,
• Listing countries that have graduated from assistance from each bank, and
• Describing U.S. efforts to end lending to countries once countries exceed the eligibility requirements.
Background:
On September 21, 2022, the Senate, in a 96-0 vote, approved an amendment declaring that China is not a developing country and should not be treated as such by the international community.
On October 26, 2021, Senator Barrasso questioned Brent Neiman, President Biden’s nominee to be the Deputy Under Secretary of the Treasury for International Finance and Development, on ensuring the administration takes action to stop multilateral development banks from lending to China.
Senator Barrasso secured provisions to end funding for China at the World Bank and Asian Development Bank in the Strategic Competition Act of 2021. On June 8, 2021, the language was included in S. 1260, which passed the Senate on June 8, 2021 (Sec. 3219D and Section 3219E).
Senator Barrasso originally introduced this legislation in the 117th Congress.
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FAQs
As of 2017, China surpassed the outstanding claims of the World Bank, IMF, or all 22 Paris Club governments combined. Unlike other major economies, much of China's external lending is official, meaning that it is undertaken by China's government, state-owned policy banks, or other state-owned entities.
Does China get money from the World Bank? ›
Within the World Bank Group, China is one of the largest loan-taking countries. From 2016 to 2018, China was the second largest borrower with $6.19 billion in loans, a number less than India ($8.05 billion) and more than Egypt ($5.23 billion).
How does the World Bank compare with Chinese Development Bank? ›
Overall, WB aid correlates more strongly with a reduction of conflict than Chinese aid. Moreover, WB aid is associated with a more positive attitude about democracy, while Chinese aid is related to an increased acceptance of authoritarian models.
What is the relationship between China and the World Bank? ›
More recently, this two-way relationship has evolved —the World Bank offers international expertise to help address China's key development challenges and pilot reforms through projects and programs; and China's development experiences enhance the Bank's global knowledge and capacity to help other developing countries.
How many countries are under China loan? ›
While lending commitments peaked at almost $136 billion in 2016, China still committed to almost $80 billion of loans and grants in 2021 according to the data, which captures almost 21,000 projects in 165 low and middle income countries as probably the most comprehensive dataset of its type.
Which countries take loan from China? ›
China's Massive Belt and Road Initiative
| Country | Loans from China | Region |
|---|
| 🇧🇴 Bolivia | $4.1B | 🌎Latin America and the Caribbean |
| 🇹🇩 Chad | $3.2B | 🌍 Sub-Saharan Africa |
| 🇸🇳 Senegal | $3.1B | 🌍 Sub-Saharan Africa |
| 🇳🇪 Niger | $2.7B | 🌍 Sub-Saharan Africa |
11 more rowsDec 11, 2023
[2] A report by the credit rating agency S&P Global in 2022 estimated that 79 per cent of corporate debt in China was owed by SOEs (the IMF does not break down the proportion of debt owed by SOEs).
Where is China getting all its money? ›
Driven by industrial production and manufacturing exports, China's GDP is actually now the largest in terms of purchasing power parity (PPP) equivalence. Despite this growth, China's economy remains strictly controlled by its government where there are accusations of corruption, unfair dealings, and falsified data.
Who owes China the most money? ›
These countries owe China billions. Some are struggling to pay
- Kazakhstan: $64.2 billion (£51bn) total debt. ...
- Angola: $64.8 billion (£52 billion) total debt. ...
- Pakistan: $68.9 billion (£55bn) total debt. ...
- Venezuela: $112.8 billion (£90bn) total debt. ...
- Russia, $169.3 billion (£134bn) total debt.
Bank of China
| Bank of China Headquarters in Beijing, China, inaugurated in 2001 |
|---|
| Number of employees | 306,322 (2021) |
| Subsidiaries | Bank of China (Hong Kong) Bank of China (Canada) |
| Capital ratio | 16.91% (2021) |
| Rating | A, A-1, Stable (S&P) A1, P-1, Stable (Moody's) A, F1+, Stable (Fitch) |
19 more rowsChina's factories generated $3.7 trillion real manufacturing value added, more than the US, South Korea, Germany and the UK combined. China's manufacturing sector benefits from one of the world's largest domestic markets, immense manufacturing scale, and highly developed manufacturing supply chains.
Will China's economy surpass the US? ›
However, even in the best-case scenario, China's ascent to surpass the United States as the world's largest economy will take longer than previously anticipated. Assuming a 5 percent annual growth rate, China might not overtake the United States until 2035.
How healthy is China's economy? ›
China's economic performance has been stellar over the past three decades, with remarkable and persistent high growth that lifted the economy from low-income to upper-middle-income status.
Is China a developing country World Bank? ›
However, the World Bank and U.N. Development Program classify China as an "upper middle income" country, while the IMF calls the country an "emerging and developing economy."
What will happen to China's economy? ›
The IMF has also become gloomier about the longer-term outlook. In November, it said it expected China's growth rate to reach 5.4% in 2023, and gradually decline to 3.5% in 2028 amid headwinds ranging from weak productivity to an ageing population.
Does the World Bank consider China a developing country? ›
However, the World Bank and U.N. Development Program classify China as an "upper middle income" country, while the IMF calls the country an "emerging and developing economy."
Which country has the most loans from World Bank? ›
India takes the top spot. Its $39.7bn debt towards the WB recorded at the end of 2021 is double that of the next biggest debtor, Indonesia, with $19.6bn. Pakistan and Bangladesh follow with $18.3bn and $17.8bn, respectively, according to WB figures.
Is China the world's largest creditor nation? ›
Since 2017, China has been the world's biggest bilateral lender; its main development banks issued nearly $500bn between 2008 and 2021.
Does the World Bank give loans to developing countries? ›
Established in 1944, the World Bank Group is headquartered in Washington, D.C. We have more than 10,000 employees in more than 120 offices worldwide. We provide low-interest loans, zero to low-interest credits, and grants to developing countries.
