China outdoes World Bank in lending to developing world

[The role of the World Bank in shaping the network of debt and dependence for the world imperialist system (and for the dominant US hegemonic role within it) is recently being challenged by the emerging imperialist rival, China, which is constructing its own global network of investment, trade, debt and dependence.–Frontlines ed.]

Beijing, Jan 18 : China has loaned more money to developing countries than the World Bank in the past two years, the Financial Times reported Tuesday.

Two state financial institutions, the China Development Bank and Export-Import Bank, loaned governments and companies in developing countries at least USD 110 billion in 2009 and 2010, surpassing the World Bank’s outlays of USD 100 billion from mid-2008 to mid-2009, which was a record for the world lending institution, the newspaper said, citing its own research.

The loans were an indication of China’s economic influence, its drive to secure raw materials and its efforts to diversify its economy away from a reliance on exports to Western developed countries, the Times said.

The money went to such projects as loans-for-oil agreements with Russia, Venezuela and Brazil; infrastructure projects in Ghana and Argentina; and power equipment for an Indian firm.

China offers most of its loans at more favourable terms than other lenders, including the World Bank, particularly when those projects coincide with its national interest.

To avoid competition over loans, the World Bank is trying to work with China and welcomed “an important and growing partnership”, the newspaper said.

“One of the topics I have been discussing with the Chinese authorities is how we can work with them to share our mutual experience to support other developing countries, whether in South-East Asia or Africa,” World Bank President Robert Zoellick said on a visit to China last year.

Both the China Development Bank and Export-Import Bank are so-called political banks and release no statements about the amount of their loans. The Financial Times said it compiled its figures from public announcements from the banks, borrowers and China’s government. The true amount of the loans could be much higher, it said.

–IANS

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