China is set to end more than five decades of borrowing from the World Bank, as the institution plans to phase out lending to the world's second-largest economy by 2031. The move reflects China's remarkable economic transformation—from a developing nation dependent on international financing to a leading global investor and development financier.

The World Bank announced the decision as part of its new five-year Country Partnership Framework (CPF), which outlines the future direction of its engagement with China.

World Bank to Gradually End Lending

According to the World Bank, lending through the International Bank for Reconstruction and Development (IBRD)—its primary lending arm for middle-income countries—will continue to decline during the CPF period and will not exceed $2 billion.

The institution also stated that, in principle, China is not expected to borrow any further from the IBRD by the end of the framework period in 2031.

The decision effectively marks the end of China’s era as a World Bank borrower, although cooperation between the two sides will continue in other forms.

A Historic Economic Transformation

China first began borrowing from the World Bank in 1981, when it was still a developing economy with limited financial resources. Over the past four decades, the country has experienced rapid industrialization, lifted hundreds of millions of people out of poverty, and become the world’s second-largest economy.

Reflecting this transformation, World Bank Managing Director of Operations Anna Bjerde said the partnership is entering a new phase focused more on knowledge sharing, innovation, and technical cooperation rather than financial assistance.

World Bank lending to China has already declined significantly—from a peak of $2.42 billion in 2017 to around $750 million in 2025.

What China Will Lose

As World Bank borrowing comes to an end, China will gradually lose several advantages traditionally available to borrower nations, including:

• Access to low-cost World Bank development financing.
• Technical expertise and policy advisory services linked to loan projects.
• Institutional support accompanying development programs.

Instead, future cooperation will focus on addressing challenges such as:

• Population ageing
• Economic restructuring
• Green and low-carbon development
• Innovation and sustainable growth

China's Deputy Finance Minister Liao Min said Beijing remains committed to strengthening cooperation with the World Bank despite the changing nature of the relationship.

China's Rise as a Global Lender

While China exits as a borrower, it has increasingly become one of the world's largest providers of development finance.

Through initiatives such as the Belt and Road Initiative (BRI), Chinese policy banks have financed infrastructure projects across Asia, Africa, Latin America, and Europe.

China also played a leading role in establishing the Asian Infrastructure Investment Bank (AIIB), which has become a major multilateral development lender.

Another milestone in China's transformation is its role in supporting the World Bank's International Development Association (IDA)—the fund that provides concessional financing to the world's poorest countries.

China stopped qualifying for IDA assistance in 2000 and has since become a contributor. During the latest funding round, Beijing pledged $1.5 billion, making it the fifth-largest donor to the IDA.

More Resources for Poorer Nations

The World Bank's decision is also expected to free up financial resources for countries with greater development needs, particularly across Africa and South Asia.

With China no longer requiring large-scale development loans, the institution can redirect more capital toward low-income economies facing significant financing gaps in infrastructure, healthcare, education, and poverty reduction.

Development experts say the shift will allow the World Bank to focus its limited resources where they can have the greatest impact.

Geopolitical Context

The decision comes amid years of criticism from the United States over continued World Bank lending to China.

During his first presidency, Donald Trump argued that China, as the world's second-largest economy, should no longer receive financing from an institution primarily designed to assist developing countries.

Although the World Bank says the transition reflects China's economic progress rather than geopolitical considerations, the move is likely to be welcomed by policymakers who have long advocated redirecting resources toward poorer nations.

A New Chapter in China's Global Role

The phase-out of World Bank lending marks a symbolic turning point in China's development journey.

For decades, Beijing relied on international financial support to modernize its economy. Today, it is increasingly acting as a global lender, investor, donor, and development partner, financing infrastructure and economic projects across the developing world.

Rather than ending cooperation, the World Bank says its future engagement with China will emphasize technical collaboration, policy innovation, and the sharing of development experience that could benefit emerging economies worldwide.

The transition underscores China's evolving role in the global financial system—from a recipient of development assistance to one of its major providers.