World Bank to phase out lending to China by 2031

Chinese flag is on display during a ate evening with the background of central business district in Beijing, China, Monday, July 15, 2024. (AP Photo/Vincent Thian)

The World Bank will phase out its lending to China by 2031, according to the organization’s new country partnership framework, a source familiar with the matter told AFP on Tuesday.

The source confirmed an earlier report of the development by the Financial Times.

“China has made significant development advances over the past several decades -- progress that the World Bank and others have supported,” said a World Bank official familiar with the matter, speaking on condition of anonymity.

“Now we are reaching a new phase of our relationship, reflecting that reality.”

World Bank lending to China -- the world’s second-largest economy -- has steadily declined in recent years as the Asian giant saw explosive growth and a reduction in poverty indicators.

In his first term in office, US President Donald Trump demanded that the World Bank stop lending to China entirely, as he adopted a more aggressive approach to Washington’s chief economic rival.

Trump has maintained that tone in his second term, but has not specifically repeated that demand.

World Bank lending to China peaked at US$2.42 billion in 2017, but has fallen since then, reducing to US$750 million in 2025.

China also contributes funds to the World Bank’s International Development Association (IDA) pool for the world’s least developed countries, with its US$1.5 billion under the latest replenishment round making Beijing the fifth-largest donor.

“The World Bank’s role is shifting from lender to knowledge partner, in line with China’s development trajectory,” said the World Bank official.

On June 16, the World Bank announced a similar plan for Poland, planning to reduce loans to zero by 2031 while maintaining technical assistance.

Asad HASHIM, AFP