The Asian Development Bank has been working “very hard” to address concerns raised by the United States about its lending practices with China, the bank’s president revealed in an interview with AFP. One of the significant steps taken by the bank includes significantly reducing the volume of loans provided to China, which is currently the world’s second-largest economy.
This move comes amid heightened scrutiny from Washington, where officials argue that wealthier nations, such as China, should no longer be major recipients of development aid. The US has been vocal in urging international financial institutions to redirect their resources toward lower-income countries that need the most help.
Global development leaders have gathered in Spain this week for a high-profile United Nations summit focused on financial assistance for the world’s poorest countries. The event, however, has been overshadowed by recent decisions from Washington to dramatically cut funding for key poverty reduction and climate change programs.
Many delegates at the summit expressed concern that the US stance could undermine global efforts to tackle urgent challenges such as inequality and environmental threats. The Asian Development Bank’s actions reflect a broader debate within development circles about how to allocate limited resources effectively.
By slashing loans to China, the bank hopes to demonstrate its commitment to supporting those nations most in need, while also keeping its largest shareholders, such as the US, on board. The outcome of this balancing act could shape the future direction of international development aid.
The United States has long played a leading role as a donor to central multilateral development banks, including the Asian Development Bank (ADB). American contributions have helped fund large-scale projects across Asia and the Pacific, ranging from infrastructure development to poverty reduction initiatives. However, the future of Washington’s support for these institutions has come into question since President Donald Trump took office. His administration frequently expressed scepticism about international aid and questioned the value of funding global development organisations.
Tensions heightened in April when US Treasury Secretary Scott Bessent addressed ADB President Masato Kanda during a high-profile meeting. Bessent urged the ADB to “take concrete steps” to halt its lending activities to China, which the US views as a strategic rival. Washington argues that China, now the world’s second-largest economy, no longer needs concessional loans intended for developing nations.
This stance reflects growing concerns in Washington over China’s expanding influence in global finance and development. The US is pushing for stricter criteria on which countries are eligible for ADB loans. These developments have cast a shadow over America’s ongoing commitment to supporting the bank’s mission. Uncertainty now lingers about whether the US will continue its traditional leadership role in multilateral development financing.
Kanda, the Japanese president of the Manila-based development bank, revealed that lending to Beijing has been significantly reduced in recent years. In an interview with AFP in Paris on Friday, he explained that loans to China had already dropped by half, from $2 billion in 2020 to just $1 billion in 2024.
“We are already on a declining trajectory,” Kanda said, describing the significant reduction as part of a deliberate shift in policy. The bank’s support for Beijing, once robust, now appears to be fading rapidly.
Looking ahead, Kanda suggested that this downward trend is likely to continue. “Probably — I can’t promise — but probably this declining trajectory will be continued, and someday may be zero,” he said.
However, he was quick to point out that the final decision rests not with him alone. Any move to completely halt lending would require approval from the bank’s shareholders and board of directors. For now, though, the message is clear: the era of substantial loans from his institution to China may soon come to an end.
Kanda explained that calls from the United States for the Asian Development Bank (ADB) to reduce its funding to China were not a recent development. In fact, he noted, this issue had persisted for several years, surviving changes in American political leadership. According to Kanda, such demands are one of the rare topics on which both Republicans and Democrats in the US Congress find common ground.
He recalled that even during President Joe Biden’s tenure, Washington had made similar requests to the ADB. The underlying concern, Kanda suggested, stems from the perception among US lawmakers that China, now a global economic powerhouse, should no longer be a major recipient of development financing.
Despite these recurring appeals from the US, Kanda observed that the ADB must carefully balance its policies. The bank faces the challenge of supporting all its member countries while navigating the geopolitical pressures that come with international finance. Ultimately, Kanda’s remarks underscored how geopolitical interests frequently influence development policy and how the debate over lending to China remains a persistent point of contention in global financial circles.
The United States and Japan hold the most significant shares in the Asian Development Bank (ADB), affording them significant influence over its direction. These two countries have been instrumental in shaping the bank’s priorities, ensuring that its resources are used to fund key infrastructure and development projects across the Asia-Pacific region. Through their leadership and financial backing, the ADB has supported roads, schools, hospitals, and clean energy initiatives that aim to raise living standards and foster economic growth for millions.
Other major players in the bank include China, India, and Australia. Each brings its perspective and resources to the table, making decisions that impact the entire region. China, with its rapid economic rise, is keen on expanding connectivity and trade links, while India seeks investments that drive inclusive growth at home and abroad. Australia often champions climate resilience and good governance.
Despite their differences, these nations share a common goal: to address what many call a ‘universal’ challenge — reducing poverty and building prosperity in one of the world’s most diverse and dynamic regions. Their cooperation within the ADB reflects a broader story of partnership and competition, as each country works to shape the future of Asia-Pacific development in ways that benefit all.
Kanda expressed strong support for the Asian Development Bank’s initiative to increase lending without requiring additional contributions from taxpayers in donor nations. He noted that this approach had been “very much appreciated by the United States and others.” This sentiment, he explained, reflected a broader desire among major donors to see aid organisations do more with existing resources.
“I try very hard to accommodate the issues of the United States,” Kanda said, emphasising the importance of maintaining good relations with key partners. His comments came during a busy week in Seville, where thousands of delegates have gathered for the International Conference on Financing for Development.
This conference is the largest of its kind in a decade, drawing attention to the deepening crisis faced by the global aid sector. Leaders, policymakers, and development experts are meeting to discuss new ways to fund critical projects amid rising needs and limited resources.
Kanda’s remarks highlight the delicate balance between donor expectations and the urgent demands of developing countries. As the event unfolds, all eyes are on whether innovative solutions, such as those championed by the ADB, can help bridge the growing funding gap.
Kanda is one of thousands who have gathered in Seville this week for the International Conference on Financing for Development. The event is being described as the most significant meeting in ten years for the crisis-stricken aid sector, drawing policymakers, activists, and donors from around the world.
For many, the stakes are higher than ever. Across continents, millions face hunger, preventable diseases, and worsening climate disasters. Delegates aim to discover innovative ways to finance lifesaving projects and revive confidence in international cooperation.
Yet a notable absence hangs over the proceedings. The United States has chosen to boycott the UN-sponsored conference. Its empty seat serves as a stark reminder of fraying global alliances and the growing reluctance among wealthy nations to invest in collective solutions.
Organisers fear that without strong backing from major powers, efforts to address urgent challenges may falter. As discussions unfold in packed halls and quiet side meetings, Kanda and others wonder if this gathering can spark the renewed commitment the world so desperately needs.
In recent years, Trump’s deep cuts to foreign aid have sparked controversy and debate. Yet, the United States is not alone. Germany, Britain, and France have also sharply reduced their aid budgets. Instead, these countries are investing more money in defence and security.
This shift has left a funding gap for vital international projects. Multilateral development banks are now under growing pressure to fill the void. The world is looking to them to finance initiatives that combat global warming and help poorer nations withstand climate disasters.
But the numbers tell a troubling story. Last year, wealthy countries pledged $300 billion a year by 2035 for climate finance in developing nations. Experts warn that this is far less than what is needed — at least $1.3 trillion annually to make a real difference.
Some hope lies with institutions like the Asian Development Bank. In 2023, the ADB committed to directing half of its annual lending toward climate-related projects by 2030. Masato Kanda, a senior official, believes this share will likely rise as the crisis deepens.
Still, with aid budgets shrinking and climate threats growing, the world faces an uphill battle.
The bank found itself navigating a period of global uncertainty unlike anything it had witnessed in decades. Markets were volatile, and economic signals shifted rapidly from one week to the next. In such turbulent times, he stressed, it was vital not to lose sight of those most at risk — the vulnerable communities who often bore the brunt of instability.
“This isn’t just a problem faced by a single nation,” he explained, his voice carrying a note of urgency. “What we’re seeing now is truly universal. The challenges stretch across borders and affect people everywhere.”
He described the situation as exceptionally difficult, with no quick fixes on the horizon. Temporary measures, he warned, would not be enough to address the underlying issues. Unless deeper problems — such as social inequality — are meaningfully addressed, the road ahead will remain rocky.
“To make real progress,” he concluded, “we have to strive for a fairer society. Otherwise, true improvement will remain out of reach.”
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