China has boomed since 1981 such that it has $3 trillion in foreign currency reserves and runs its own global infrastructure bank. Per capita income, approaching $10,000, meets eligibility criteria for “graduation” from World Bank support. Meanwhile, democratic political development has not followed economic progress. Under President Xi Jinping, China has evolved new forms of repression, most notably mass imprisonment of mostly Muslim Uighurs in the northwestern province of Xinjiang.
The World Bank lent China $50 million in 2015 to support the Xinjiang Technical and Vocational Education and Training Project, later implicated in China’s anti-Uighur internment campaign, according to a report in Foreign Policy magazine based in part on an internal World Bank whistleblower. The bank approved the loan before the actual internment of Uighurs began, but it continued to disburse funds even after news of the abuses broke. Amid a bipartisan uproar in Congress, the World Bank investigated the loan and announced in August that its funds had not been “diverted, misused or used for activities not in line” with bank policy. Nevertheless, last month, the bank said it would make changes, including “enhanced supervision,” to the project.
The notion that U.S. public funds could be helping Beijing’s campaign against the Uighur people, even indirectly, is indeed scandalous. Yet it is the sort of accident that was waiting to happen as long as the World Bank continued to do business in Mr. Xi’s China. Deep poverty does remain in that country, even now, and so there is a reasonable case to be made for a World Bank role — especially for projects that target global concerns such as reducing carbon emissions. In that sense, the Trump administration’s call for a complete cutoff may be counterproductive.
However, the administration and bipartisan China critics in Congress were right to seek a gradual tightening of lending requirements for China as a condition of last year’s $13 billion contribution to the World Bank from the United States and other countries. The bank’s country director for China, Martin Raiser, said Thursday that the bank’s lending will be “increasingly selective” and that overall lending will gradually decline. Halfway through the five years, the bank will assess China for “graduation.” We can only assume that, in the meantime, any lending that directly or indirectly enables human rights violations would be selected out. Congress must keep the pressure on to make sure that it is.