World Bank to phase out lending to China by 2031 with $2 billion cap until then

The World Bank announced it will phase out its lending to China by 2031 as part of a new five-year country partnership framework agreed with Beijing ^{[1, 2, 3, 4, 5, 6, 7]}. Between now and 2031, lending will be capped at $2 billion, roughly RM8.2 billion or S$2.59 billion, before ending entirely after that date ^{[1, 2, 3, 4, 6, 7]}.

Lending to China has already declined sharply from about $2.4 billion in 2017 to an estimated $750 million in 2025 ^{[1, 2, 3, 4, 5, 6, 7]}. This reflects China’s shift from a borrowing country to a major donor within the World Bank system. China exited eligibility for the World Bank’s International Development Association (IDA) for the poorest countries in 2000, and became a donor to the IDA in 2007. It is now ranked as the fifth-largest contributor to the fund ^{[1, 2, 3, 4, 5, 6, 7]}.

A senior World Bank official said, “China has made significant development advances over the past several decades. Now we are reaching a new phase of our relationship, reflecting that reality.” The official added, “The World Bank's role is shifting from lender to knowledge partner, in line with China's development trajectory” ^[5].

The US government supports the World Bank’s decision. A Treasury spokesperson said, “As the second-largest economy in the world, China should not be receiving handouts from multilateral institutions.” The spokesperson called the phase-out “a step in the right direction” and urged other international entities like the Asian Development Bank and UN agencies to similarly end aid to China ^{[1, 2, 3, 4, 6, 7]}.

China’s Finance Ministry described the declining loans as a natural consequence of changing domestic demand and evolving cooperation. It reaffirmed that China will continue working with the World Bank going forward ^{[2, 3, 8, 4, 6]}.

The phased reduction is similar to the World Bank’s recent decision to end lending to Poland by 2031 ^{[1, 2, 4, 5]}.

The World Bank board is scheduled to review the phase-out plan during the week of July 20, 2026. No formal vote is required for final approval ^{[1, 2, 3, 4, 6, 7]}.