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Trump to World Bank: China has plenty…Stop lending it more

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The President of United States of America Donald Trump urged World Bank

The US President, Donald Trump, urged World Bank to stop lending any more money to China as he believed the communist nation had enough finances to manage its operations.

Trump in a tweet on Friday night wrote, “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!”

It was not only Trump but many in his administration who held the same opinion, including Steven Mnuchin, US Treasury Secretary. On Thursday, Mnuchin told a House of Representatives committee that the US “has objected” to the World Bank’s multi-year program of loans and projects in China.

Even David Malpass, the current head of the World Bank, held the same view on Bank’s loans to China when he was a treasury department official, before taking on his new position.

Trump’s tweet was a reaction to the World Bank’s announcement which came on Thursday, declaring its plan to aid China with about $1bn to $1.5bn amount of loan at low-interest rates, annually until 2025. The World Bank announced its plan to lend a relatively lesser amount of money in order to “gradually decline” from the earlier five-year average of $1.8bn.

Despite the fall in World Bank’s loans to China from $2.4bn in 2017 to $1.3bn in 2019, the US is questioning the reason for the institution’s decision to grant aid to a wealthy nation like China, which is the world’s second-largest economic power.

US objected to World Bank’s loaning scheme, especially with respect to China, as the country was disappointed with the level of drop-in loan. US felt it was not enough.

On Thursday, Martin Raiser, the World Bank’s China director, said that the Bank’s new plan “reflects the evolution of our relationship with China”. He said, “Our engagement will be increasingly selective.” 

World Bank emailed its statement to Reuters, which read, “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. We eliminate lending as countries get richer.”

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