U.S. Congressman Anthony Gonzalez (R-Rocky River) introduced a new bill, H.R. 5051, the Accountability for World Bank Loans to China Act, to curb World Bank funding to China by graduating the country from the World Bank’s International Bank for Reconstruction and Development (IBRD) program. Despite far exceeding the economic threshold for the program, China has received $7.8 billion from the World Bank IBRD since 2016.
“The United States cannot afford to give the World Bank a blank check as long as they continue to make cloudy investments and misuse taxpayer dollars by providing loans to countries that do not and should not qualify for them,” said Congressman Gonzalez. “I cannot stand by and allow my constituents’ taxpayer money to go to China while they continue to abuse this nation and suppress democracy as we have seen in Hong Kong.”
The World Bank IBRD program is designed to provide loans for economic-development purposes to middle-income developing countries. The threshold for graduation from the IBRD program currently stands at a gross national income per capita level of $6,975, which China has exceeded since 2016. China currently has a World Bank calculated gross national income per capita of level of $9,470. The Accountability for World Bank Loans to China Act codifies Congress’ support for Administration efforts to graduate China from IBRD lending in a vote at the World Bank.
Additionally, Congressman Gonzalez’s bill includes provisions to help protect poor and middle-income countries that China seeks to take advantage of through their Belt and Road Initiative (BRI). The program, which has been used by China as a debt-diplomacy tool to advance its own interests around the world, has left countries like Sri-Lanka with unsustainable debt payments resulting in state-owned Chinese company control over key infrastructure projects across the globe. A recent Center for Strategic and International Studies report found at least eight BRI recipient countries are currently at a high risk of debt distress due to BRI loans and facing rising debt-to-GDP ratios beyond 50 percent with at least 40 percent of external debt owed to China. H.R. 5051 lays the groundwork for debt management assistance to borrowing countries of the BRI and seeks to help these countries ensure transparency in their loans from China before they sign on the dotted line.