The World Bank plans to phase out lending to China over the next five years, marking a significant shift in its relationship with the world’s second-largest economy, according to a source familiar with the organisation’s new Country Partnership Framework.
The source confirmed an earlier report by the Financial Times, saying the move reflects China’s economic progress after decades of rapid growth and declining poverty.
“China has made significant development advances over the past several decades — progress that the World Bank and others have supported,” a World Bank official, who spoke on condition of anonymity, said.
“Now we are reaching a new phase of our relationship, reflecting that reality.”
The World Bank has steadily reduced its lending to China in recent years as the country’s economy expanded and development indicators improved.
Instead of focusing on loans, the institution now intends to strengthen its role as a provider of technical expertise.
“The World Bank’s role is shifting from lender to knowledge partner, in line with China’s development trajectory,” the official said.
The decision comes after years of pressure from the United States. During his first term, US President Donald Trump urged the World Bank to stop lending to China altogether, arguing that the country no longer required financial support from the institution.
Although Trump has maintained a tough stance on China in his second term, he has not publicly renewed that specific demand.
China remains an important contributor to the World Bank despite the planned lending phase-out. Under the latest replenishment of the International Development Association (IDA), which supports the world’s poorest countries, Beijing pledged $1.5 billion, making it the fund’s fifth-largest donor.
The World Bank’s lending to China peaked at $750 million last year, but the planned withdrawal signals a broader shift in the bank’s engagement with countries that have reached higher levels of development.
Last month, the World Bank announced a similar approach for Poland, saying it would reduce lending to zero while continuing to provide technical assistance.
