Grassley Seeks End to World Bank Funding for China

March 2, 2020 Updated: March 3, 2020

It’s time to stop the World Bank from giving loans to China, said Sen. Chuck Grassley (R-Iowa), who has introduced legislation to block the organization from issuing more funding to the world’s second-largest economy.

As the United States is the largest contributor to the World Bank, it’s all the more important to ensure that U.S. taxpayer dollars aren’t funding Beijing’s abuses of human rights, Grassley said at a recent event sponsored by the Victims of Communism Memorial Foundation, a nonprofit organization established by Congress under the Clinton administration.

Amnesty International and several news organizations have reported that 1 million or more Muslim Uyghurs are being held by the Chinese regime and forced into re-education programs, which are designed to detach them from Islam and reorient them psychologically to accept a fully secular Chinese identity.

While the regime has said that facilities widely documented as camps of mass detention in Xinjiang Province are just ordinary vocational and training centers, Grassley, who serves as chairman of the Senate Finance Committee, said this claim is “nonsense.”

Referring to secret documents that have recently come to light, Grassley said that these centers had purchased barbed wire, body armor, and tear gas, “using other funds.”

Meanwhile, the World Bank continues to operate a “technical and vocational educational project in Xinjiang,” he said at the event on Feb. 23. “Just having such an ongoing project in Xinjiang with that name, and the seal of approval of the World Bank, lends legitimacy to China’s disingenuous claim to be concerned about vocational skills for local Muslims.”

He also said that giving loans to China, the second-largest economy after the United States, doesn’t align with the World Bank’s mission.

“The World Bank was created to help economic development in the world’s poorest countries,” he said. “China ought to be embarrassed claiming it is a developing country.”

Grassley noted that China passed its “graduation date” from the World Bank in 2016, when its income level exceeded the World Bank’s own threshold for loan qualification.

China’s Influence

Kyle Bass, founder and principal of Hayman Capital Management and longtime China critic, questioned the World Bank’s ties with China. “Over time, and especially under the supervision of World Bank Group President Jim Yong Kim, the World Bank has grown to be under the increasingly outsized influence of China,” he said.

The World Bank, Bass noted, was created in 1944 for the purpose of aiding war-torn and poor nations to rebuild and to develop.

“Why does the world continue to lend development money to China?” he asked.

“How can we fight [the Chinese Communist Party’s] infiltration and exploitation of the World Bank?”

In January 2019, the World Bank appointed Hua Jingdong, a Chinese national, as its treasurer. Hua oversees a “US$200 billion debt portfolio and an asset portfolio of nearly US$200 billion” as well as a “derivatives portfolio of US$600 billion … and annual cashflows of over US$7 trillion equivalent,” according to his official profile.

Yang Shaolin, a Chinese national, serves as managing director and World Bank Group chief administrative officer. According to the World Bank’s biographical data, Yang previously served as “Director General for International Economic and Financial Cooperation at the Ministry of Finance of China, in charge of economic and financial cooperation between China and foreign governments as well as international financial institutions.”

Such senior Chinese government positions are almost invariably filled by members of the Chinese Communist Party.

Since fiscal year 2016, when China should have no longer been eligible for loans, Beijing has received $8 billion in World Bank funding.

Public World Bank documents detail the Procurement Plan for the Xinjiang project identified by both Grassley and Bass. The project, known as the “Xinjiang Technical and Vocational Education and Training Project,” revised on Jan. 3, 2020. Line items for “school-based reform and innovations” include a comprehensive training center for an actual amount of just over $5 million.

According to the World Bank document, goods to be procured include a “Xinjiang Uygur medical college new campus network campus construction plan” for nearly $2 million, nearly $143,000 for a “virtual reality training room of Urumqi Vocational University and school-enterprise cooperation,” as well as close to $24,000 for a “Xinjiang Uygur medical college students mental health and counseling center.” About $83,000 is designated for a “development of national common language teaching platform,” while $111,000 goes to “Urumqi vocational university students large original stage musical.”

A national common language teaching platform refers to Chinese Mandarin language teaching, required throughout China as the language of instruction, bypassing local languages. Production of plays and musicals promoting CCP propaganda are common political tools that have been used for decades in schools and workplaces. All media in China are supervised and censored by Party authorities.

Ending Funding

Grassley has introduced two bills to end World Bank funding for China.

Senate Bill 3018 is “a bill to require the United States Executive Director of the International Bank for Reconstruction and Development to oppose assistance by the Bank for any country that exceeds the graduation threshold of the Bank and is of concern with respect to religious freedom.”

That speaks directly to Grassley’s concerns that China is ineligible to receive World Bank assistance, and that the illegitimate assistance it is receiving is going directly to programs to deny a population of its religious freedoms.

The International Bank for Reconstruction and Development (IBRD) and its sister organization, the International Development Association, are collectively known as the World Bank, as they share personnel.

Senate Bill 3017, the “Accountability for World Bank Loans to China Act of 2019,” is designed to pursue the “expeditious graduation of the People’s Republic of China from assistance by the IBRD.”

The bill notes that “the IBRD examines a country’s potential graduation when the country reaches the Graduation Discussion Income (GDI), which amounts to a Gross National Income (GNI) per capita of $6,975,” and that “the World Bank calculates China’s GNI per capita as equivalent to $9,470,” showing that China is 35 percent above World Bank’s own graduation guidelines.