Development & Education

China: The new World Bank

This story is a part of

Human Needs

This story is a part of

Human Needs


Photo of Chinese President Hu Jintao with the leaders of Russia, Brazil, and India (Image by Wikimedia user (cc:by))

This story was originally covered by PRI's The Takeaway. For more, listen to the audio above.

Player utilities

Listen to the Story.

Over the past two years, China's banks have loaned at least $110 billion to governments and companies in other developing nations. That's more money than the World Bank, making China the world's number one investor in emerging economies.

The total amount of money isn't fully known. The Financial Times collected the latest statistics by examining public announcements by the banks, the borrowers or the Chinese government. The real numbers could be higher.

"The World Bank has been trying to find ways to co-operate with Beijing to avoid escalating competition over loan deals," The Financial Times reports. It added that "China itself has been one of the biggest recipients of World Bank loans in the past."

"China has a lot of cash available to try to win friends and influence," BBC Correspondent, Chris Hogg, told PRI's The Takeaway. The government is funneling money through two state-owned banks to further its national interests. Hogg says, "it helps them to secure energy supplies, it helps them to secure influence, to win friends at organizations like the United Nations."

The loans also make financial sense. "It's probably easier for the Chinese to invest in some of those emerging markets than it would be in more developed markets like the U.S. or Europe," Hogg points out. "Their products or their infrastructure projects are much more welcome in developing countries." It makes sense for the borrowers, too. Hogg reports, "some people are getting a better deal from the Chinese than they are from other international organizations."

Not all of the loans are specifically about securing natural resources, though many of them are. Hogg reports that China has invested oil-producing countries like Venezuela and Iran, but also "in things like a new cardiac unit at a hospital in Tanzania, for example." The exact nature or mix of the investments is still unknown, however, since China doesn't publish the details of its loans.

"The Takeaway" is a national morning news program, delivering the news and analysis you need to catch up, start your day, and prepare for what's ahead. The show is a co-production of WNYC and PRI, in editorial collaboration with the BBC, The New York Times Radio, and WGBH.