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The World Bank is set to phase out lending to China by 2031 under a proposal that has been submitted to its board, bringing an end to the Washington-based institution’s relationship with Beijing as a borrower. The move comes after years of pressure from several countries, including the US, which have been seeking to limit China’s access to international financial assistance.
According to a summary of the proposal seen by the Financial Times, the World Bank will gradually scale back its lending to China over the next eight years. Under the plan, lending to the country will not exceed $2 billion between 2023 and 2031, marking a significant reduction from the levels of support provided in the past.
The decision follows years of pressure from the Trump administration and other countries to end lending to China, a move that reflects China’s rapid economic rise and its growing status as a major global power. The US has long been a key player in the World Bank, and its influence has helped shape the institution’s policies and decisions.
In recent years, the World Bank has faced growing criticism for its lending practices, particularly in countries with weak financial systems and high levels of corruption. Some critics have argued that the institution’s support has in some cases benefited China’s economic interests at the expense of other countries.
The World Bank proposal is set to be discussed by its board during the week of July 20, with a final decision expected in the coming months. The move is likely to have significant implications for China, which has been a key beneficiary of World Bank support in the past.
Experts say that the decision is a recognition of China’s growing economic strength and its ability to finance its own development projects without external support. “This is a natural transition for China, given its rapid economic growth and increasing financial capabilities,” said one expert, who spoke on condition of anonymity.
The World Bank’s decision is also seen as a reflection of its efforts to rebalance its lending portfolio and focus on supporting low-income and middle-income countries that are in greater need of financial assistance.
The proposal has sparked debate among World Bank stakeholders, with some arguing that the institution should maintain its lending relationship with China to support its development and economic growth. Others see the move as a necessary step to reflect the changing landscape of global economic power.
The outcome of the proposal is expected to have significant implications for the World Bank’s lending policies and its relationships with China and other countries.