The World Bank announced on December 5 that the board of directors of the bank has passed a new plan to provide China with low-interest loans of US$1 billion to US$1.5 billion each year by June 2025. But the US Treasury Secretary Mnuchin said that China is already a rich country and should no longer enjoy such international assistance.
World Bank Building
World Bank announced on December 5 that the board of directors of the Bank announced on December 5th that A new plan was passed to provide China with a low-interest loan line of US$1 billion to US$1.5 billion (approximately RMB 7 to 10.6 billion) each year by June 2025. Although this move was publicly opposed by US Treasury Secretary Steven Mnuchin and several US lawmakers.
Mnuchin stated at the hearing of the House Financial Services Committee that the representative of the U.S. Treasury Department on the World Bank’s board of directors opposed the loan plan. He said that China should "graduate" from the World Bank's preferential loan program for low- and middle-income countries.
He asked the World Bank to remove China from the list of low- and middle-income countries. He believes that China is already a rich country and should no longer enjoy such international financial assistance.
Thursday afternoon, after the World Bank’s board of directors stated that the multilateral development bank would “widely support and participate in China’s structural reforms and environmental protection,” the five-year loan strategic plan was officially released.
The World Bank stated that in accordance with the USD 13 billion capital increase agreement reached in 2018, the World Bank will reduce loans to China in accordance with the “Country Partnership Framework” plan.
As of June 30, 2019, the World Bank has provided US$1.3 billion in loans to China, down from approximately US$2.4 billion in fiscal year 2017. The new plan calls for a "gradual decline" in loan lines from an average of US$1.8 billion in the previous five years.
U.S. Treasury Secretary Mnuchin and President Trump
The World Bank stated in its plan that China has requested the World Bank The International Bank for Reconstruction and Development of China continues to provide funding "as a supporting project for economic reforms, institution building, and knowledge transfer."
But for Mnuchin, the US Treasury Secretary’s loans to China are not falling fast enough because China is already too rich, and China has provided hundreds of projects to poor countries through the “Belt and Road” infrastructure. Hundreds of billions of dollars in loans.
Keeping pace with U.S. officials, U.S. lawmakers are also increasingly expressing concern that U.S. taxpayers provide financial subsidies to China through World Bank loans.
Senate Finance Committee Chairman Charles Grassley criticized the World Bank's China loan program when speaking in the Senate on Thursday. Grassley said: "The World Bank uses U.S. taxes and should not lend to rich countries, especially these countries are trying to dominate the weaker countries militarily or economically."
Representative Anthony, Ohio Republican Gonzalez (Anthony Gonzalez) proposed legislation to restrict the World Bank's funding to China. He said: "For me, for us taxpayers in the United States, even one dollar loan to China is too much."
U.S. Representative Gonzalez tried to pass legislation to restrict the World Bank from providing low-interest loans to China
It is reported that according to the World Bank’s proceedings According to the rules, although the United States has effective veto power over major board decisions such as the capital increase and the appointment of leadership of the World Bank, this latest loan plan to China does not require a formal vote.
Mnuchin told U.S. lawmakers that he expects the World Bank’s loans to China to fall below US$1 billion this fiscal year because the repayment of funds from China back to the World Bank is greater than the loans. .
The World Bank said that the loans provided to China in the new five-year plan will be aimed at promoting market and fiscal reforms to encourage the development of the private sector; promoting greener growth by reducing pollution and carbon emissions; and increasing Chinese citizens have access to medical and social services.
(This article is based on a summary of international media real-time reports, compiled exclusively by Haojiangke)
