ADB could phase out loans to China, incoming president Masatsugu Asakawa says
- Asian Development Bank is a multilateral lender seeking to lift millions of Asians out of poverty. Some say China no longer needs such support
- Asakawa also warned that ‘slowdown in Chinese growth is inevitable’ and urged Beijing to ensure a soft landing
The Asian Development Bank (ADB) must be ready to discuss whether to phase out aid to high- and medium-income borrowers like China, the institution’s next president Masatsugu Asakawa said.
“Deep-rooted, structural problems have led to a gradual decline in China’s potential and real economic growth. A slowdown in Chinese growth is unavoidable,” he said.
“Given its huge size, a hard landing will have a huge impact not just on China but on the global economy. We hope China engineers an orderly soft landing. I’m sure the authorities are fully mindful of the need for that,” he said on Friday.
Despite its ageing population, excess capacity and bad debt problems, China has become the second-largest economy in the world.
That has led some to say it should no longer receive loans from the ADB, a Manila-based multilateral lender whose aim is to lift hundreds of millions of Asians out of poverty.