Ideas to Action:

Independent research for global prosperity

CGD in the News

China still borrows billions in low-cost loans from World Bank, as Trump administration pushes back (CNBC)

January 10, 2019

From the article:

China is borrowing billions of dollars each year from the World Bank, despite its position as the world's second-largest economy, according to a study released Thursday.

"If we want China to be a more responsible lender in the world, then let's use the World Bank to help them along with that," said Scott Morris, a senior fellow at the Center for Global Development and lead author of the study.

The study showed China enjoys a discount rate of over 1 percent on World Bank loans versus the 10-year Treasury. That leaves room for the bank to charge higher rates. Morris says charging higher rates could keep China from turning away from the World Bank and focusing more on its own institutions, such as the Asia Infrastructure Investment Bank.

"If they are feeling less and less welcome at the World Bank they will be more motivated to pursue those channels," said Morris.

Related Experts

Photo of Scott Morris
Senior Fellow, Director of the US Development Policy Initiative