Bill Summary
This legislation, called the "Accountability for World Bank Loans to China Act of 2019," aims to increase transparency and accountability in the World Bank's lending to China. It states that China has a large amount of foreign exchange reserves and has created rival development banks and initiatives, potentially undermining the World Bank's role. The legislation also notes that the World Bank stops providing loans to countries that are able to sustain their own development, and that China has reached this threshold but is still receiving loans. The Act requires the United States Governor of the International Bank for Reconstruction and Development (IBRD) to work towards expediting China's graduation from World Bank assistance, and also requires a report to be submitted on efforts to ensure this graduation and promote debt transparency within 2 years. The Act also requires a report on debt management assistance provided by the World Bank and other institutions to countries involved in China's Belt and Road Initiative.
Possible Impacts
1. This legislation could affect people in China, specifically those who rely on World Bank loans, as it aims to limit the amount of funding and potentially force China to graduate from the IBRD within 2 years.
2. It could also affect the United States and its government officials, as they would be responsible for enforcing the policies outlined in the bill.
3. The legislation could also impact other countries involved in the Belt and Road Initiative, as it requires the Secretary of the Treasury to report on debt management assistance and efforts to promote debt transparency.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5051 Introduced in House (IH)]
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116th CONGRESS
1st Session
H. R. 5051
To increase transparency and accountability with respect to World Bank
lending for China, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 12, 2019
Mr. Gonzalez of Ohio introduced the following bill; which was referred
to the Committee on Financial Services
_______________________________________________________________________
A BILL
To increase transparency and accountability with respect to World Bank
lending for China, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Accountability for World Bank Loans
to China Act of 2019''.
SEC. 2. FINDINGS.
The Congress finds as follows:
(1) Possessing more than $3,000,000,000,000 in foreign
exchange reserves, the People's Republic of China has devoted
state resources to establish the Asian Infrastructure
Investment Bank, the New Development Bank, and activities under
the Belt and Road Initiative, potentially creating rivals to
the multilateral development banks led by the United States and
its allies.
(2) The International Bank for Reconstruction and
Development (IBRD), the World Bank's primary financing
institution for middle-income countries, ceases to finance
(``graduates'') countries that are able to sustain long-term
development without recourse to Bank resources.
(3) 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.
(4) The World Bank calculates China's GNI per capita as
equivalent to $9,470.
(5) According to the Center for Global Development, China
has received $7,800,000,000 in IBRD commitments since crossing
the GDI threshold in 2016.
SEC. 3. UNITED STATES SUPPORT FOR GRADUATION OF CHINA FROM WORLD BANK
ASSISTANCE.
(a) In General.--The United States Governor of the International
Bank for Reconstruction and Development (IBRD) shall instruct the
United States Executive Director at the IBRD that it is the policy of
the United States to pursue the expeditious graduation of the People's
Republic of China from assistance by the IBRD, consistent with the
lending eligibility criteria of the IBRD.
(b) Sunset.--Subsection (a) shall have no force or effect on or
after the earlier of--
(1) the date that is 7 years after the date of the
enactment of this Act; or
(2) the date that the Secretary of the Treasury reports to
the Committee on Financial Services of the House of
Representatives and the Committee on Foreign Relations of the
Senate that termination of subsection (a) is important to the
national interest of the United States, with a detailed
explanation of the reasons therefor.
SEC. 4. ACCOUNTABILITY FOR WORLD BANK LOANS TO THE PEOPLE'S REPUBLIC OF
CHINA.
(a) In General.--Before contributing on behalf of the United States
to the nineteenth replenishment of the resources of the International
Development Association (in this section referred to as the
``Association''), the United States Governor of the Association, shall
submit the report described in subsection (b) to the Committee on
Financial Services of the House of Representatives and the Committee on
Foreign Relations of the Senate.
(b) Report Described.--The report described in this subsection
shall include the following:
(1) A detailed description of the efforts of the United
States Governor of the Association and the United States
Governor of the International Bank for Reconstruction and
Development (in this section referred to as the ``IBRD'') to
enforce the timely graduation of countries from the
International Development Association and the IBRD, with a
particular focus on the efforts with regard to the People's
Republic of China.
(2) If the People's Republic of China is a member country
of the IBRD, an explanation of any economic or political
factors that have prevented the graduation of the People's
Republic of China from the IBRD.
(3) A discussion of any effects resulting from fungibility
and IBRD lending to China, including the potential for IBRD
lending to allow for funding by the government of the People's
Republic of China of activities that may be inconsistent with
the national interest of the United States.
(4) An action plan to help ensure that the People's
Republic of China graduates from the IBRD within 2 years after
submission of the report, consistent with the lending
eligibility criteria of the IBRD.
(c) Waiver of Requirement That Report Include Action Plan.--The
Secretary of the Treasury may waive the requirement of subsection
(b)(4) on reporting to the Committee on Financial Services of the House
of Representatives and the Committee on Foreign Relations of the Senate
that the waiver is important to the national interest of the United
States, with a detailed explanation of the reasons therefor.
SEC. 5. ENSURING DEBT TRANSPARENCY WITH RESPECT TO THE BELT AND ROAD
INITIATIVE.
Within 180 days after the date of the enactment of this Act, the
Secretary of the Treasury shall submit to the Committee on Financial
Services of the House of Representatives and the Committee on Foreign
Relations of the Senate a report that includes the following:
(1) An analysis of debt management assistance provided by
the World Bank, the International Monetary Fund, and the Office
of Technical Assistance of the Department of the Treasury to
borrowing countries of the Belt and Road Initiative of the
People's Republic of China (or any comparable initiative or
successor initiative of China).
(2) A discussion of United States efforts at the World
Bank, the International Monetary Fund, and any other
international financial institution to promote debt
transparency with respect to credit provided by China.
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