US objects to World Bank’s new lending plans for China
US President Donald Trump has called on the World Bank to stop lending money to China, which has "plenty of money," a day after the international institution adopted a new five-year plan to aid Beijing with a low-interest loan.
The international development organization said on Thursday it has adopted a new five-year Country Partnership Framework to aid China with a loan of between $1 billion dollar and $1.5 billion a year until 2025.
The decision was made despite US Treasury Secretary, Steven Mnuchin, having already “objected” to the institution’s program of loans and projects in China.
He told a House Financial Services Committee hearing on Thursday that the Treasury's representative on the board had objected to the plan on Wednesday.
Mnuchin said he wants the World Bank to "graduate" China from its concessional loan programs for low- and middle-income countries.
The move immediately prompted a reaction from Trump, who took to Twitter, and questioned the organization’s decision on Friday.
“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!” he wrote.
The US – the World Bank’s largest shareholder — which has an effective veto power over major board decisions, has no veto power over lending to specific countries.
Since taking office in 2017, the Trump administration has been pushing the organization to reduce lending.
The bank loaned Beijing $1.3 billion in the 2019 fiscal year, which ended on 30 June, a decrease from about $2.4 billion in 2017.
The US objection comes as Beijing and Washington are expected to reach a trade agreement within the next 10 days.
Despite the progress, Trump has threatened to impose additional tariffs on about $156 billion of Chinese imports later this month, as part of the long-running trade war between the two world powers.
China has, however, warned Washington that tariffs must be cut if they are to reach an interim agreement on the trade dispute.
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