New Act Mandates US Opposition to All Development Loans for China and Other Wealthy Nations

If you’re wondering where your tax dollars go, especially the portion funding international development banks, this bill is about to get very specific. The Ending Lending to China Act of 2025 is straightforward: it declares that China is too rich to keep receiving development loans and mandates that the U.S. government fight against any further financial assistance going its way.

The Graduation Threshold: No More Free Lunch

Congress’s argument, detailed in Section 2, is that China has clearly graduated from needing development aid. They point out that China is the world’s second-largest economy, sitting on over $3.28 trillion in foreign exchange reserves as of April 2025. More crucially, the World Bank already classifies China as an upper-middle-income country, and its Gross National Income (GNI) per capita has surpassed the $7,895 threshold used by these banks for years. The bill highlights that China received over $12.9 billion from the International Bank for Reconstruction and Development (IBRD) since 2016 and nearly $1 billion from the Asian Development Bank (ADB) in 2024, despite being well past the income level where countries are expected to 'graduate' from borrowing.

Putting the Treasury on Offense

This bill doesn't just express an opinion; it sets a firm policy. The Secretary of the Treasury is now required to instruct the U.S. representative at every multilateral development bank (MDB)—think the World Bank, the ADB—to actively oppose any new loans or technical assistance to the People's Republic of China. This is a clear directive to use America's substantial voting power to shut down the lending faucet.

But here’s the crucial detail that expands the scope: the U.S. representative must also push for an end to all lending and assistance to any country that has passed that “graduation discussion income” threshold. This isn't just about China; it sets a new, hard line for all countries deemed wealthy enough to self-finance. For example, if a country like Chile or Malaysia, which might also be near or past that GNI threshold, has a specific regional development project they were planning to fund through an MDB, the U.S. will now be mandated to oppose it. This could cause friction, as some upper-middle-income countries still rely on MDB expertise and financing for specific infrastructure or climate projects.

What This Means for Global Finance and Oversight

For the average person, this bill aims to ensure that development capital—which is often subsidized or backed by member nations, including the U.S.—is directed toward genuinely low-income countries that need it most. It’s essentially a move to increase accountability, making sure that international financial institutions stick to their core mission of poverty reduction rather than subsidizing major economic players.

However, the implementation could get complicated. Mandating the U.S. to aggressively oppose lending to all countries above the income threshold (Section 2, “What the Treasury Secretary Must Do”) could strain relationships within the MDBs. These banks operate on consensus, and if the U.S. takes too hard a line, it risks losing influence on other important development goals. The policy is clear, but the diplomatic cost of enforcing it remains to be seen.

To keep Congress in the loop, the Treasury Secretary must provide an annual report detailing how much China is borrowing, its voting power in the banks, and a full explanation of the steps the U.S. has taken to push all high-income countries out of the lending programs. This ensures continuous oversight and pressure on the MDBs to change their lending practices.