ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Interview

Trump's World Bank pick Malpass says China loans will shrink

Treasury official plans Japan visit to muster support for US proposals

David Malpass, nominee for President of the World Bank, speaks at an event with U.S. President Donald Trump at the White House on Feb. 6.    © Reuters

WASHINGTON -- U.S. President Donald Trump on Wednesday nominated David Malpass, a Treasury Department official who has advocated major cuts to World Bank loans to China, to lead the multilateral lender.

Malpass told Nikkei and other media that he recognizes the importance of Japan as the second-largest investor after the United States and hopes to visit the country to seek Tokyo's approval for revisions to the bank's China policy.

In terms of lending to China, "it's already been agreed within the Bank" that it will be wound down, he said.

There are questions as to why the world's second-largest economy should borrow from the World Bank "when there are robust capital markets in China," he said.

Malpass noted that under changes made in 2018, the World Bank aims to decrease its share of lending to countries above a certain income threshold to 30% from 40%. Because China is one such country, he said decreasing lending to Beijing "should be relatively quickly done."

"It doesn't make too much sense for the higher income countries to be drawing so many of the resources of the Bank when there are poorer countries that could make use of those resources," he said.

Malpass also discussed China's Belt and Road infrastructure building initiative, leveling criticisms that "it's often not transparent, that the procurement is not done in a transparent way, that it doesn't generate quality projects, and that it leaves countries with heavy burdens of debt."

He said he did not know whether there will be other candidates to lead the World Bank, but that he will be "reaching out to major shareholders and the countries that are engaged with" the organization.

Trump's choice contrasts sharply with Jim Yong Kim, who stepped down as World Bank president on Feb. 1, a resignation that some see as due to clashes with the administration over China.

Malpass handled international affairs at the Treasury Department. Overseas Private Investment Corporation CEO Ray Washburne was also under consideration until the end, according to a government source. But Malpass ultimately was chosen for his aggressive push to the World Bank to increase lending rates to China.

Trump announced his pick at the White House with Malpass at his side. Malpass serves as Treasury's undersecretary for international affairs and is point man for international finance in Washington's trade talks with Beijing.

The former chief economist at failed investment bank Bear Stearns advised Trump's 2016 presidential campaign.

The World Bank is accepting nominations from Thursday through mid-March. Its board and major members like Japan and European nations are expected to back the pick by the U.S., the organization's largest shareholder.

But some emerging and developing economies hope to break Washington's hold on the post by fielding their own candidates.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends April 19th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media