Key facts
- The World Bank will phase out lending to China by 2031.
- The World Bank will no longer commit to allocating 45% of its annual lending to projects with climate co-benefits.
- US Treasury Secretary Scott Bessent advocated for the removal of the climate finance target.
- Lending to China will be limited to $2 billion between now and 2031.
- World Bank lending to China has declined from $2.4 billion in 2017 to $750 million in 2025.
The World Bank is set to phase out its lending to China by 2031, reflecting the country's status as the world's second-largest economy. This decision, agreed upon as part of China's five-year country partnership framework, will limit lending to Beijing to $2 billion between now and 2031. World Bank lending to China has steadily declined from $2.4 billion annually in 2017 to an anticipated $750 million in 2025. The U.S. and other nations have long advocated for the bank to cease lending to China, viewing its continued borrowing as an irritant. A U.S. Treasury spokesperson described the move as a "step in the right direction." Concurrently, the World Bank will also drop its 45% climate finance target, a move supported by U.S. Treasury Secretary Scott Bessent, who argued for prioritizing affordable energy access, including fossil fuels, for developing countries.