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AFP
December 8, 2019

Donald Trump calls on WB to stop lending to China

Business

AFP
December 8, 2019


Washington: US President Donald Trump lashed out at the World Bank on Friday, blaming the international financial institution for lending money to China.

“Why is the World Bank loaning money to China? Can this be possible? China has plenty of money, and if they don't, they create it. STOP!” Trump wrote on Twitter.

The president was reiterating a position long held by his administration, including David Malpass when he was a Treasury Department official prior to his election as the current head of the World Bank.

Trump’s message on the World Bank was also echoed by his treasury secretary, Steven Mnuchin, who told a House of Representatives committee on Thursday that the United States “has objected” to the institution´s multi-year program of loans and projects in China.

The World Bank planned to aid China with $1 billion to $1.5 billion in low-interest loans annually through June 2025. The plan calls for lending to “gradually decline” from the previous five-year average of $1.8 billion.

That program was nonetheless adopted on Thursday. It plans to reduce its lending to China.

The program “reflects the evolution of our relationship with China,” Martin Raiser, World Bank Country Director for China, said on Thursday. “Our engagement will be increasingly selective.”

But the reduction is not enough for Washington, which argues that the world’s second-largest economy is rich enough to finance itself and not depend on loans from the World Bank, which is supposed to bring financial resources to poor countries.

“World Bank lending to China has fallen sharply and will continue to reduce as part of our agreement with all our shareholders including the United States,” the World Bank said in an emailed statement to Reuters.

“We eliminate lending as countries get richer.”

Spokespeople for the White House declined to comment on the record.

Trump´s very public stance comes amid negotiations between Washington and Beijing seeking to end the US

president´s 18-month-long trade war, which is aimed at forcing China to make concessions on protecting American businesses and reducing its trade surplus.

There is a great deal of uncertainty about the date of a possible partial agreement, which Trump said was imminent in October.

The World Bank loaned China $1.3 billion in the fiscal 2019 year, which ended on June 30, a decrease from around $2.4 billion in fiscal 2017.

But the fall in the World Bank’s loans to China is not swift enough for the Trump administration, which has argued that Beijing is too wealthy for international aid.

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