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US Treasury Nominee to Work on Borrowing Alternatives to China

Jay Shambaugh said he would work with international financial institutions and development banks to give countries more borrowing alternatives


One of US President Joe Biden's key Treasury nominees wants to hit China's economy by limiting its growing global lending influence.
US Treasury nominee Jay Shambaugh said China should no longer be considered a developing country eligible for World Bank loans. File photo: Reuters.

 

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

 

 

READ MORE:

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China Comes Through with $2.3 Billion Loan to Pakistan

Sri Lanka Counts on China Loan Amid IMF Talks – FT

 

 

George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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