The World Bank said its board on Thursday adopted a new plan to aid China with $1 billion to $1.5 billion in low-interest loans annually through June 2025, despite the objections of U.S. Treasury Secretary Steven Mnuchin and several U.S. lawmakers.
Mnuchin told a House Financial Services Committee hearing that the Treasury’s representative on the board had objected on to the plan on Wednesday, adding he wants the World Bank to “graduate” China from its concessional loan programs for low- and middle-income countries.
The five-year lending strategy plan was published on Thursday afternoon after the World Bank’s board “expressed broad support” for the multilateral development lender’s engagement in China’s structural and environmental reforms.
The World Bank said its lending would decline over the “country partnership framework” plan, in line with reformsagreed under a $13 billion capital increase agreed in 2018.
The World Bank loaned China $1.3 billion in the fiscal 2019 year ended June 30, down from about $2.4 billion during fiscal 2017. The new plan calls for lending to “gradually decline” from the previous five-year average of $1.8 billion.
“Lending levels may fluctuate up and down from year to year due to normal pipeline management based on project readiness,” the World Bank said in its plan.