Does China Lend More to LDCs Than World Bank?

In case you missed it, here's further proof of how far China has come in terms of winning friends and influencing people. Paramount Leader Hu Jintao pretty much came, saw, and conquered (veni, vidi, vici) his obsequious, occasionally backstabbing lodgers renting the PRC's subprime North American real estate whose (very dysfunctional) tenants association is led by--who else?--Barack "China Currency Coalition" Obama. Now hilariously lame get-tough-on-China campaign pledges aside, Obama and the rest of the administration toadies' eagerness to please their betters only further underlines who wears the pants in today's global political economy.

However, the hapless Yanks are not the only recipients of Chinese largesse. China is reported by many news outlets [e.g. 1, 2, 3, 4] to have surpassed that archetypal Washington-based institution the World Bank in loan volume provided to developing countries--with an important caveat I'll mention in a while. Of course, the kind of money China provides is strategic since its biggest lenders are not PRC aid bodies per se but trade finance bodies alike export-import (ExIm). While not particularly caring about its recipients' human rights records or any of that Western BS those folks used to package with freedom 'n' growth shtick, it's perhaps no coincidence Obama doesn't make any demand on that front, either. Beggars can't be choosers, and Washington is just one of the many mendicants jockeying for manna from, er, Beijing:

China has lent more money to other developing countries over the past two years than the World Bank, a stark indication of the scale of Beijing’s economic reach and its drive to secure natural resources. China Development Bank and China Export-Import Bank signed loans of at least $110bn (£70bn) to other developing country governments and companies in 2009 and 2010, according to Financial Times research. The equivalent arms of the World Bank made loan commitments of $100.3bn from mid-2008 to mid-2010, itself a record amount of lending in response to the financial crisis.

Their timing was exemplary in picking up the pieces when the Westerners fled:

The volume of overseas loans by the two banks indicates how Beijing is forging new patterns of China-led globalisation, as part of a broader push to scale back its economic dependency on western export markets.

The financial crisis allowed Beijing to push the commercial interests of its energy companies by offering loans to producer countries at a time when financing was hard to come by. The agreements include large loan-for-oil deals with Russia, Venezuela and Brazil, as well as loans for an Indian company to buy power equipment and for infrastructure projects in Ghana and railways in Argentina.

There has been much comment on this article claiming that China now lends more to LDCs than the World Bank before I came upon it, but there is an important caveat nonetheless which almost all missed by (1) not bothering to read the entire article and/or (2) not really understanding the structure of the Washington-based lender. The comparison is arguably incomplete insofar as the Financial Times writers only tallied loans from two out of three World Bank lending arms--the International Bank for Reconstruction and Development (IBRD) and the lender to the private sector the International Finance Corporation (IFC). They didn't include those made by the World Bank's concessional arm the International Development Association (IDA) that forks money over at obviously concessional (subsidized, well below market) rates. Then again, their argument is that China does the same in providing financial aid but they too ignored that part of the PRC loan portfolio for lack of publicly available data:

The World Bank figures are for the International Bank of Reconstruction and Development, the bank’s main lending arm, and the International Finance Corporation, which lends to the private sector. They do not include the International Development Association, which makes grants and low-interest loans. China also gives financial aid to other developing countries, but provides little detail.

I have two observations before ending. First, those claiming that China now lends more to LDCs than the World Bank cannot do so on the basis of this article since even its authors don't go that far for want of data. Second, it will probably provoke a further outcry from those who continually observe that China itself is still a pretty significant recipient of ODA from international development agencies. You can make the argument that China is a huge place with several noticeably underdeveloped pockets and that help may come more in the form of technical assistance, but it is undeniably jarring alongside the largesse it sets aside meant to win friends and influence people.