One of US President Joe Biden’s key Treasury nominees wants to limit China’s growing global lending influence.
If Jay Shambaugh is confirmed as undersecretary for international affairs, he said he would work with international financial institutions and development banks to give countries more borrowing alternatives.
The nominee for the top economic diplomacy job told a Senate finance committee confirmation hearing, that there is competition between the state-driven model used in China’s economy and the US model driven by rule of law, transparency and markets.
He said in working with institutions including the World Bank and International Monetary Fund (IMF) he would seek to present “a good alternate option to engaging with China for countries, whether it’s in loans or other sorts of engagements”.
Shambaugh added that China’s economy should no longer be considered developing and eligible for World Bank loans.
He also said he wants to ensure that IMF Special Drawing Rights channelled to poorer countries are not used to pay off debts owed to China for Belt and Road infrastructure projects.
Shambaugh echoed Treasury Secretary Janet Yellen’s comments that some of the tariffs imposed on China had “less of a strategic orientation to them” and should be reassessed as both the US’s and China’s economy has changed since they were imposed.
- Reuters, with additional editing by George Russell