Why is the World Bank phasing out its lending to China by 2031?

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The World Bank is phasing out its lending to China by 2031 due to China's significant development progress and a shift in the bank's relationship with the country.

The World Bank will conclude its lending operations to China by 2031, a decision rooted in the organisation's new country partnership framework. This move acknowledges China's substantial development advancements over recent decades, which have led to a redefinition of the World Bank's engagement with the nation. Consequently, the bank's role is evolving from that of a lender to a knowledge partner.
China's Economic Development and Poverty Reduction

World Bank lending to China has been on a consistent downward trend in recent years, a direct reflection of China's robust economic growth and significant reductions in poverty indicators. This economic trajectory has altered the country's need for external financial support from institutions like the World Bank. The shift in lending reflects the evolving economic standing of China on the global stage.
A New Phase in the Relationship

The World Bank's engagement with China is entering a new phase that recognises the country's development achievements. Lending figures illustrate this transition, with a peak of US$2.42 billion in 2017 being followed by a projected reduction to US$750 million for the year 2025. This tapering signifies a deliberate move away from traditional loan-based support.
Evolving Role to Knowledge Partner

As China's development continues, the World Bank's function is transitioning. The organisation is shifting its focus from being a primary lender to serving as a knowledge partner. This change aligns with China's own development trajectory and its increasing capacity to finance its own projects. China also contributes to the World Bank's International Development Association (IDA) pool, demonstrating its role as a donor, with a contribution of US$1.5 billion making it the fifth-largest donor. A similar approach has been outlined for Poland, which will also see its loans reduced to zero by 2031, while technical assistance will continue.

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Why is the World Bank phasing out its lending to China by 2031?

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