No funding for the world's second largest economy: The US President Donald Trump's government wants to cut China off from World Bank lending. "Why is the World Bank lending money to China, how can that be?" Trump wrote on Twitter. "China has a lot of money and if they do not have one, they can do it." That must stop.
Why is the World Bank loaning money to China? Can this be possible? China has plenty of money, and if they do not, they create it. STOP!
- Donald J. Trump (@realDonaldTrump) December 7, 2019One of the main tasks of the Washington-based World Bank is to fight poverty in developing countries by granting cheap loans. According to their own information, about $ 1.4 billion went to China in the current year - far less than the $ 2.4 billion transferred in 2017. In addition to China's economic recovery, this decline could also be linked to a change at the head of the World Bank, whose presidents are traditionally made by the US.
Current boss David Malpass - a close associate of US Treasury Secretary Steven Mnuchin - was promoted to the head of the institute by Trump in April. He is considered a critic of China and its strategy to increase the political and economic influence of the People's Republic by infrastructure projects in third countries, such as in the case of the controversial "Silk Road Initiative".
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Mnuchin called on Thursday to cut the Bank's lending to China. He cited as reasons the economic strength of the People's Republic and systematic human rights violations as in the northwestern region of Xinjiang. While his government can not block "every single loan", it can use its influence on the World Bank to reduce financial aid to China. The US Congress has to decide on a capital increase for the World Bank.
Chuck Grassley of the Senate Finance Committee called on the World Bank to freeze a $ 50 million grant on a project in western China. Given the repression of Muslims in the region, there is a suspicion that behind the alleged training center hides a reeducation camp that should be funded with millions. According to officially unconfirmed estimates, China's authorities have put hundreds of thousands of people into such facilities.
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Grassley pointed out that the World Bank's money should not be used for "vile ends" and that China lends itself to third countries for geopolitical motives. This would lead the system to absurdity. However, the US also has high liabilities to China.