Trump urges World Bank to stop lending to China

Trump urges World Bank to stop lending to China

Washington, Dec 7: US President Donald Trump has criticized the World Bank for loaning money to China on low-interest rates and urged the institution to stop lending to Beijing.

“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,” Trump tweeted on Friday.

Trump’s criticism comes after the World Bank on Thursday adopted a plan to lend China $1 billion to $1.5 billion in low-interest loans annually for the period between 2020 and 2025, reports Efe news.

US Treasury Secretary, Steven Mnuchin, also reacted to the World Bank’s announcement.

In a Congressional hearing, he said on Friday that the Trump administration had opposed the new five-year framework lending plan by the bank that has already loaned over $1 billion to China this year.

“We negotiated significant reductions in China lending with a path to get below $1 billion. We submitted our objection to the current country plan,” Mnuchin said.

The reductions that Mnuchin referred to are part of a $13-billion capital increase the US supported for the bank last year reluctantly though. The US is the World Bank’s largest shareholder but it does not have veto power over lending to any country.

World Bank loans to China fell from $2.4 billion in 2017 to $1.3 billion this year.

With his criticism of the World Bank for loans to China, Trump has opened a new front in an ongoing confrontation with Beijing.

The two largest economies in the world are currently locked in a long-running trade dispute that has already accumulated tariffs of billions of dollars.

The trade war runs the risk of aggravation with new impositions if Washington and Beijing do not reach an agreement before the end of this year.

Besides, Trump recently enacted two bills in support of protests in Hong Kong that provide for sanctions against Chinese officials. The move has angered Beijing.

The US Congress is now considering another bill in support of Muslim minorities in the Xinjiang Uighur Autonomous Region, which also provides for sanctions against Beijing officials.