US Treasury Secretary Janet Yellen said Tuesday that international economic institutions such as the IMF and the World Bank “serve as a counterweight” to loans provided by great powers such as China, which she cited as an example.
“These institutions reflect the values of the United States,” Treasury Secretary Joe Biden told the House Financial Services Committee.
He added that the weight of the United States of America “within these institutions is one of the main means of dealing with emerging markets and developing countries.”
Assistance from international financial institutions “implies stringent requirements in terms of governance, liability and debt sustainability,” which “provides an important counterbalance to the opaque and volatile lending provided by other countries such as China,” Yellen added.
China is one of the major lenders to developing countries, and the conditions under which its loans are granted are regularly criticized by the international community, namely for the lack of transparency in the process.
During a speech in the House of Representatives, Yellen opposed the World Bank lending money to China. “We will not support or vote for any World Bank loan to China. We will use our [direito de] veto to object,” he said.
The United States has the most influence of all World Bank member states, being the only one with a de facto veto over the institution since its inception after World War II.
The Biden administration is also keeping a close eye on some U.S. investments abroad by companies “that invest in Chinese companies associated with their military.” “We are concerned about potential national security risks,” Janet Yellen said.
“We are studying possible restrictions on foreign investment,” he stressed.
However, according to the Treasury Secretary, “it would be disastrous for the United States” to “try to disassociate itself from China.” “Although we have issues that need to be addressed, separation would be a serious mistake,” he insisted.
Yellen also recalled that under the International Monetary Fund (IMF), the United States has asked Congress to renew its participation in loan agreements and has submitted a request for permission to receive a loan of up to $21 billion from investment funds from the Inter-American Bank. development and the African Development Fund, targeting developing countries to counter the growing influence of China.