Accountability for World Bank Loans to China Act of 2019

II 116TH CONGRESS 1ST SESSION S. 3017 To increase transparency and accountability with respect to World Bank lending for the People’s Republic of China, and for other purposes. IN THE SENATE OF THE UNITED STATES DECEMBER 11, 2019 Mr. GRASSLEY (for himself and Mr. COTTON) introduced the following bill; which was read twice and referred to the Committee on Foreign Relations A BILL To increase transparency and accountability with respect to World Bank lending for the People’s Republic of China, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Accountability for 4 World Bank Loans to China Act of 2019’’. 5 SEC. 2. FINDINGS. 6 Congress finds as follows: 7 (1) Possessing more than $3,000,000,000,000 8 in foreign exchange reserves, the People’s Republic 9 of China has devoted state resources to establish the 10 VerDate Sep 11 2014 23:55 Dec 16, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3017.IS S3017 kjohnson on DSK79L0C42 with BILLS 2 •S 3017 IS Asian Infrastructure Investment Bank, the New De- 1 velopment Bank, and activities under the Belt and 2 Road Initiative, potentially creating rivals to the 3 multilateral development banks led by the United 4 States and its allies. 5 (2) The International Bank for Reconstruction 6 and Development (IBRD), the World Bank’s pri- 7 mary financing institution for middle-income coun- 8 tries, ceases to finance (‘‘graduates’’) countries that 9 are able to sustain long-term development without 10 recourse to Bank resources. 11 (3) The IBRD examines a country’s potential 12 graduation when the country reaches the Graduation 13 Discussion Income (GDI), which amounts to a Gross 14 National Income (GNI) per capita of $6,975. 15 (4) The World Bank calculates China’s GNI 16 per capita as equivalent to $9,470. 17 (5) According to the Center for Global Develop- 18 ment, China has received $7,800,000,000 in IBRD 19 commitments since crossing the GDI threshold in 20 2016. 21 SEC. 3. UNITED STATES SUPPORT FOR GRADUATION OF 22 CHINA FROM WORLD BANK ASSISTANCE. 23 (a) IN GENERAL.—The United States Governor of 24 the International Bank for Reconstruction and Develop- 25 VerDate Sep 11 2014 23:55 Dec 16, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3017.IS S3017 kjohnson on DSK79L0C42 with BILLS 3 •S 3017 IS ment (in this section referred to as the ‘‘IBRD’’) shall 1 instruct the United States Executive Director at the 2 IBRD that it is the policy of the United States to pursue 3 the expeditious graduation of the People’s Republic of 4 China from assistance by the IBRD, consistent with the 5 lending eligibility criteria of the IBRD. 6 (b) SUNSET.—Subsection (a) shall have no force or 7 effect on or after the earlier of— 8 (1) the date that is 7 years after the date of the 9 enactment of this Act; or 10 (2) the date that the Secretary of the Treasury 11 reports to the Committee on Financial Services of 12 the House of Representatives and the Committee on 13 Foreign Relations of the Senate that termination of 14 subsection (a) is important to the national interest 15 of the United States, with a detailed explanation of 16 the reasons therefor. 17 SEC. 4. ACCOUNTABILITY FOR WORLD BANK LOANS TO THE 18 PEOPLE’S REPUBLIC OF CHINA. 19 (a) IN GENERAL.—Not later than 360 days after the 20 date of the enactment of this Act, the United States Gov- 21 ernor of the International Bank for Reconstruction and 22 Development (in this section referred to as the ‘‘IBRD’’) 23 shall submit the report described in subsection (b) to the 24 Committee on Financial Services of the House of Rep- 25 VerDate Sep 11 2014 23:55 Dec 16, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3017.IS S3017 kjohnson on DSK79L0C42 with BILLS 4 •S 3017 IS resentatives and the Committee on Foreign Relations of 1 the Senate. 2 (b) REPORT DESCRIBED.—The report described in 3 this subsection shall include the following: 4 (1) A detailed description of the efforts of the 5 United States Governor of the International Devel- 6 opment Association and the United States Governor 7 of the IBRD to enforce the timely graduation of 8 countries from the International Development Asso- 9 ciation and the IBRD, with a particular focus on the 10 efforts with regard to the People’s Republic of 11 China. 12 (2) If the People’s Republic of China is a mem- 13 ber country of the IBRD, an explanation of any eco- 14 nomic or political factors that have prevented the 15 graduation of the People’s Republic of China from 16 the IBRD. 17 (3) A discussion of any effects resulting from 18 fungibility and IBRD lending to China, including 19 the potential for IBRD lending to allow for funding 20 by the Government of the People’s Republic of 21 China of activities that may be inconsistent with the 22 national interest of the United States. 23 (4) An action plan to help ensure that the Peo- 24 ple’s Republic of China graduates from the IBRD 25 VerDate Sep 11 2014 23:55 Dec 16, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3017.IS S3017 kjohnson on DSK79L0C42 with BILLS 5 •S 3017 IS not later than 2 years after submission of the report, 1 consistent with the lending eligibility criteria of the 2 IBRD. 3 (c) WAIVER OF REQUIREMENT THAT REPORT IN- 4 CLUDE ACTION PLAN.—The Secretary of the Treasury 5 may waive the requirement of subsection (b)(4) on report- 6 ing to the Committee on Financial Services of the House 7 of Representatives and the Committee on Foreign Rela- 8 tions of the Senate that the waiver is important to the 9 national interest of the United States, with a detailed ex- 10 planation of the reasons therefor. 11 SEC. 5. ENSURING DEBT TRANSPARENCY WITH RESPECT 12 TO THE BELT AND ROAD INITIATIVE. 13 Not later than 180 days after the date of the enact- 14 ment of this Act, the Secretary of the Treasury shall sub- 15 mit to the Committee on Financial Services of the House 16 of Representatives and the Committee on Foreign Rela- 17 tions of the Senate a report that includes the following: 18 (1) An analysis of debt management assistance 19 provided by the World Bank, the International Mon- 20 etary Fund, and the Office of Technical Assistance 21 of the Department of the Treasury to borrowing 22 countries of the Belt and Road Initiative of the Peo- 23 ple’s Republic of China (or any comparable initiative 24 or successor initiative of China). 25 VerDate Sep 11 2014 23:55 Dec 16, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3017.IS S3017 kjohnson on DSK79L0C42 with BILLS 6 •S 3017 IS (2) A discussion of United States efforts at the 1 World Bank, the International Monetary Fund, and 2 any other international financial institution to pro- 3 mote debt transparency with respect to credit pro- 4 vided by China. 5 Æ VerDate Sep 11 2014 23:55 Dec 16, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\S3017.IS S3017 kjohnson on DSK79L0C42 with BILLS