America wants the World Bank to stop making loans to China

THE CARIBBEAN islands of St. Kitts and Nevis are known for luxury tourism (visitors include Meryl Streep and Oprah Winfrey), pricey citizenship (on sale for $150,000), and a sprint world champion (Kim Collins). But despite the country’s many assets (including a national income per person of over $18,000) it is eligible for loans from the World Bank, an institution dedicated to eradicating extreme poverty.

Because the islands are so small, this draws little comment. Not so for China. Its income per person is half that of St. Kitts and Nevis, and lower than that of Poland, Malaysia, Turkey and 15 other potential borrowers. But its eligibility to borrow from the World Bank strikes many Americans as anomalous, even scandalous.

One of them is President Donald Trump. “Why is the World Bank loaning money to China? Can this be possible?” he tweeted on December 6th, a day after the bank discussed a new five-year lending framework for America’s rival. Another used to be the World Bank’s president, David Malpass, in his former job as an American treasury official. In 2017 he argued that “it doesn’t make sense to have money borrowed…using the US government guarantee, going into lending in China”. Steven Mnuchin, the treasury secretary, heard similar sentiments in a congressional hearing on December 5th. “What are you doing to stop...



via The Economist: Finance and economics Business Feeds

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