China Made a Ton of Risky Loans to Third-World Nations to Bring Them Under Its Sphere of Influence. Now Those Loans are Turning Bad.
China Wants the US to Bail It Out.

This is such a disgusting demand to even make that I'm 90% sure that the "US" Congress will agree to to it.

Why Trump is doing this, I have no idea. I saw someone saying that he inherited this position from Biden's Treasury Secretary Janet Yellen, but that doesn't seem like a good reason to keep it.

President Trump is scheduled to visit Beijing in May for a summit with Chinese President Xi Jinping, and he will come bearing at least one surprising gift: A budget request to Congress to hand more money to Mr. Xi's friends at the International Monetary Fund.

We told you recently about the Trump Administration's fiscal 2026 request that Congress endorse a U.S. quota increase of 50%, equivalent to about $55 billion. The quota is a country's contribution to the fund. Congress didn't pass the White House request, but the Administration includes it again in its recent fiscal 2027 proposal.

Treasury Secretary Janet Yellen initiated the request in the Biden era, and it's hard to understand why the Trump Treasury would endorse it. It's true, as Treasury says, that the U.S. receives an "interest-bearing claim on the IMF" for those assets. But it's not a wash because the interest rate doesn't compensate for the cost of funds or the risk.

More harmful is the cost to U.S. control over IMF resources, which Treasury conceals... What Treasury doesn't disclose is the hit to U.S. power when the IMF gets more of its resources from equity than debt.

The fund's use of debt via New Arrangements to Borrow requires 85% approval of voting shares. Since the U.S. has almost 16% of those shares, it has a veto over the use of those resources. It also has an effective veto over Bilateral Borrowing Agreements. But it has no veto power over use of equity--that is, the quota resources.

I think this means that the money we pour into the IMF through this "quota" will be used according to how the multinational organization IMF decides -- and we'll have no say.

And whose power over the use of those funds will increase? Well, China's, of course.

Mr. Xi wants a greater role for China in all multilateral institutions at the expense of U.S. influence. Shifting total fund resources toward quotas would shrink U.S. veto power over IMF resources to 38% from about 60%. IMF managing director Kristalina Georgieva said recently she's optimistic Congress will pass the increase this year that will bolster the fund's $1 trillion in lending capacity from its own resources, rather than from borrowing over which the U.S. has more influence.

That will be welcome news in Beijing, which wants to use the fund to rescue the array of distressed Chinese loans around the world. Let's hope Congress says no again.

I don't know if Trump made this promise to get China to agree to something else. But China's sending dual-use materials to Iran after having vowed that they would not, so I don't see the value of a CCP promise.

Bonchie @bonchieredstate

5h

China went around Africa and South America making predatory loans in an attempt to make money and seize infrastructure for the most useful part of its lifespan.

And now it wants others to pay for its bad bets.

We hold 16% of the vote over the IMF. The answer should be no.

Ted Cruz
@tedcruz

Apr 22

This is a terrible idea.

Congress should say hell NO, to bailing out China.

Related: I give Trump a knock, now I'll give him a plaudit.

Marco Rubio is reportedly about to announce a permanent cut-off of all aid to the Pirate Collective of Somalia after the pirates there demolished a warehouse containing 76 tons of American food aid.

🚨 BREAKING: Secretary of State Marco Rubio is expected to PERMANENTLY CUT OFF U.S. aid to Somalia after the country demolished a warehouse holding 76 TONS of American food, per Daily Wire.

GOOD. Cut off the gravy train.

Rubio said it perfectly. Foreign aid is NOT charity. It… pic.twitter.com/TywvAg23Ph

— Pascal Najadi (USSF)🇺🇸 (@JfkPascalNajadX) April 23, 2026

posted by Disinformation Expert Ace at 05:52 PM

| Access Comments