World Bank to phase out lending to China by 2031
World Bank to phase out lending to China by 2031
World Bank to Phase Out Lending to China by 2031
The World Bank has announced plans to phase out its lending to China by 2031, marking a significant shift in the organization's relationship with the world's second-largest economy. The decision, which was agreed upon by the World Bank and China as part of its five-year "country partnership framework," reflects China's rapid economic growth and development over the past several decades.
According to sources familiar with the plan, the World Bank's board will review the proposal during the week of July 20, although no formal vote is needed. The change would limit the multilateral development bank's lending to Beijing to $2 billion between now and 2031, ending it thereafter. This move is seen as a natural progression, given China's significant development advances and its growing role as a major donor to the World Bank's International Development Association (IDA) facility.
World Bank lending to China has been steadily declining, from $2.4 billion in 2017 to $750 million in 2025. China exited eligibility for loans under the IDA facility in 2000 and began contributing to the facility in 2007, becoming the fifth-largest donor. The World Bank's role is shifting from lender to knowledge partner, in line with China's development trajectory, according to a World Bank official.
The United States and other countries have long pushed for the World Bank to stop lending to China, given its growing economic power. The U.S. Treasury has welcomed the move, calling it "a step in the right direction" and urging other institutions to follow suit. A senior U.S. Official has also stated that China should not be eligible for development funding, given the size of its economy, and has called for assistance from other institutions, such as the Asian Development Bank and UN agencies, to end as well.
China's finance ministry has responded to the announcement, stating that the gradual decline in World Bank loans to China is a natural result of changes in domestic demand and the transformation of cooperation between the two sides. China will continue to strengthen cooperation with the World Bank in addressing global challenges, the finance ministry said.
The World Bank's decision to phase out lending to China is not an isolated incident. The organization has recently announced a similar plan for Poland, aiming to reduce loans to zero by 2031 while maintaining technical assistance.
