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Asian Development Bank to Consider Ending New Loans to China

According to Masatsugu Asakawa, head of the Asian Development Bank (ADB), the organization will take up the issue of new loans to China as early as next year and discuss discontinuing future loans to China.

Analysts claim that because China, now the second-largest economy in the world, has a higher income level and offers financial aid to other Asian countries, it is no longer dependent on outside aid.

Following $9 billion between 2016 and 2020, the ADB intends to lend China up to $7.5 billion between 2021 and 2025. Next year, the bank will decide whether to stop extending new financing to China beyond 2025.

ADB offers loans to nations that meet specific requirements, such as having a gross national income of $7,455 or less per person, having trouble raising funds on the global market, and having economic development indicators that fall below a specified threshold. With a per capita GNI already above $7,455, China has no trouble obtaining financing on the global market.

China was the second-largest borrower after India at the end of 2021, with a balance of ADB loans totaling about $19.6 billion, or 14 percent of the bank’s total outstanding loans.

The ADB has 68 members, including Japan and the U.S., who each have 15.6 percent of the organization’s shares, followed by China coming in with 6.4 percent. To aid in the financing of infrastructure projects in the region, China also established the Asian Infrastructure Investment Bank.

Some nations contend that China shouldn’t keep getting loans as its influence in Asia’s infrastructure development grows. Singapore and South Korea are no longer recipients of the loans.

Source: Central News Agency (Taiwan), August 19, 2022 percent