The World Bank is offering technical assistance to China to combat the coronavirus epidemic, but no new loans, said development lender President David Malpass on Monday.
David Malpass advised Reuters that the bank is working with the World Health Organization (WHO) to help China, including advice on past health crises, but is not planning financial support because China has sufficient resources of its own.
"I think we all wish them a quick way to fight the coronavirus in China," he said in an interview on Monday. "We offered technical support in the areas of health, hygiene and illness."
The World Bank was founded after World War II to rebuild Europe. It has approximately $ 470 billion in assets and is one of the largest borrowers in China. Loans totaling $ 14.8 billion have been granted since 2011. China is the bank's third largest shareholder after the United States and Japan.
"China has its own large international reserves, and new loans are currently not being considered," said David Malpass, a former Trump administration finance officer who took over as World Bank President in April last year.
China reported that it held $ 3.115 trillion in reserve assets in January.
In the January 29 statement, David Malpass expressed his sympathy for the loss of the Chinese people and added: "This is a serious public health challenge in China and the rest of the world. It requires ongoing coordinated action and continued transparency in China and surrounding areas the world. "
He said the World Bank experts were in talks with the Chinese authorities and could provide immediate help with disease monitoring, food safety, lessons from previous pandemics, and analysis of the impact of the outbreak on the Chinese economy.
Within China, more than 300 companies, from grocery services to smartphone makers, are seeking over $ 8.2 billion in loans to alleviate the effects of the corona virus, banks told Reuters.
Economic growth is expected to slow to 5% or less this quarter due to the virus, an economist from the Chinese government estimates.
David Malpass declined to estimate the impact of the crisis on economic growth in China or the world. He said it was too early to say whether the World Bank's already lukewarm forecast for the full year would be cut.
"Coronavirus will slow growth in the first half of 2020. We'll have to wait and see what long-term consequences this will have if the response takes place and the adjustments are made," he said. "China has just returned from a long New Year, so we have to rate growth."
Since taking office in the Treasury in 2017, David Malpass has criticized the World Bank's continued low interest rate lending to China, arguing that the world's second largest economy is too rich for such aid, while burdening some countries with debt from his Belt and Road infrastructure program.
David Malpass, former Bear Stearns economist and co-chief, advised President Donald Trump on the 2016 election campaign and called for more bank funding to be provided to poorer countries in Africa, Asia and Latin America.
A February 3 pledge by the World Bank to review funds that could be deployed quickly was aimed at poorer countries that could be affected by the pandemic, a bank employee said.
China agreed to a reduction in borrowing from reforms related to a $ 13 billion World Bank capital increase approved by shareholders in 2018.
The World Bank adopted a new five-year plan for China in December that provides $ 1 to $ 1.5 billion in annual lending, compared to $ 1.8 billion in annual average over the past five years.
David Malpass said that lending to China in fiscal 2020, which ends June 30, would likely fall below that range.
Although the bank is "processing" its loans to China as part of a capital increase in 2018, the bank would grant funding for certain "global public goods," said David Malpass.
These include environmental projects, private sector development and reforms for state-owned companies.
The only new funding from China approved by the World Bank in fiscal year 2020 is a $ 150 million loan for a $ 686 million project to conserve forests in the upper reaches of the Yangtze Basin.