Bill Summary
The "Accountability for World Bank Loans to China Act of 2019" is a bill that aims to increase transparency and accountability in World Bank lending to the People's Republic of China (PRC). This bill is in response to concerns about China's growing economic power and its establishment of rival development banks and initiatives that may jeopardize the role of the World Bank and its allies.
The bill includes various provisions, such as requiring the United States Governor of the International Bank for Reconstruction and Development (IBRD) to pursue the graduation of China from IBRD assistance. The bill also calls for a report to be submitted to Congress within 360 days, which will detail efforts to enforce the timely graduation of countries from the IBRD and provide an action plan to ensure that China graduates within two years.
Additionally, the bill addresses concerns about China's Belt and Road Initiative, which provides loans to developing countries for infrastructure projects. The bill requires a report to be submitted within 180 days on debt management assistance provided by international financial institutions to borrowing countries of the Belt and Road Initiative, as well as efforts to promote debt transparency with respect to credit provided by China.
Possible Impacts
1) The legislation could potentially limit the amount of loans that the World Bank can give to the People's Republic of China, making it more difficult for the country to fund large-scale projects.
2) Chinese citizens may face increased scrutiny and accountability for their country's use of World Bank loans, potentially leading to stricter regulations and oversight.
3) The legislation could affect the relationship between the United States and China, potentially causing tension and strained diplomatic ties as the US attempts to influence the handling of China's loans.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3017 Introduced in Senate (IS)]
<DOC>
116th CONGRESS
1st Session
S. 3017
To increase transparency and accountability with respect to World Bank
lending for the People's Republic of China, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 11, 2019
Mr. Grassley (for himself and Mr. Cotton) introduced the following
bill; which was read twice and referred to the Committee on Foreign
Relations
_______________________________________________________________________
A BILL
To increase transparency and accountability with respect to World Bank
lending for the People's Republic of 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.
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 (in this section referred to as
the ``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.--Not later than 360 days after the date of the
enactment of this Act, the United States Governor of the International
Bank for Reconstruction and Development (in this section referred to as
the ``IBRD'') 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 International Development Association
and the United States Governor of 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 not later than 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.
Not later than 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.
<all>