The World Bank confirmed on Thursday that it plans to phase out lending to China by 2031 under the organization’s new country partnership framework for the world’s second-largest economy.
Agence France-Presse first reported that the multilateral lender would take the action last month.
The World Bank Group said in a post on its website that “IBRD lending will continue to be phased down to a maximum of $2 billion during the Provident Fund period,” referring to loans provided through the IBRD.
The CPF is a mutually agreed plan between the bank and the client country that outlines development priorities over a multi-year period.
“In principle, the IBRD is not expected to borrow further until the end of the provident fund period.”
The World Bank Group said the five-year central provident fund “marks a new phase in the 45-year partnership” as China shifts from needing financing to primarily needing technical assistance and knowledge sharing.
“As our partnership evolves, we increasingly focus on knowledge, innovation and shared solutions,” said Anna Bjerde, World Bank managing director for operations.
World Bank lending to China has declined steadily in recent years as the Asian giant has experienced explosive growth and poverty indicators have fallen.
“As China grapples with challenges such as an aging society, economic transformation and other development priorities, we will work with them to come up with ideas that are important not only to China, but also to emerging markets around the world,” Bjed said.
China’s Vice Finance Minister Liao Min said that no matter how the lending relationship changes, China will continue to deepen its engagement with the World Bank.
The World Bank’s new five-year plan with China focuses on achieving economic growth while delivering better jobs, social resilience and a low-carbon economy.
U.S. President Donald Trump, in his first term, asked the World Bank to stop lending to China entirely as he took a more aggressive approach against Washington’s main economic rival.
Trump has maintained this tone throughout his second term without specifically reiterating the demand.
World Bank lending to China peaked at $2.42 billion in 2017 but had fallen to $750 million by 2025.
China has also contributed to the World Bank’s International Development Association’s pool of funds for the world’s least developed countries, with contributions in the latest round of replenishment reaching $1.5 billion, making Beijing the fifth-largest donor.
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This article was generated from automated news agency feeds without modifications to the text.
