On July 12th, Jay Shambaugh, currently a nominee for the top economic diplomacy post at the U.S. Treasury Department, said that international financial institutions and development banks should work together to provide countries with lending programs to limit the Chinese Communist Party (CCP)’s global lending influence known as the Belt and Road Initiative.
Speaking to a Senate Finance Committee confirmation hearing, Shambaugh said the CCP’s model is a national economy driven by a dictatorship, and it is in complete competition with the U.S. model driven by markets and transparency. When the United States works with institutions such as the World Bank and the International Monetary Fund (IMF), it is necessary to provide countries with alternatives to engage with the CCP, such as loans or other assistance. He also commented that China should no longer be considered eligible for World Bank loans, and the special currency reserves in some poor countries should not be used to repay debts for the CCP’s ‘Belt and Road’ infrastructure projects.
Shambaugh is the Biden Administration’s nominee for Deputy Secretary of the Treasury for International Affairs. He is currently in the process of nomination and has not officially taken office.