Echoing the sentiments of U.S. Treasury Secretary Scott Bessent, it got us very excited about the prospects of a big bilateral trade agreement between the United States and China. Here are some highlights from his speech, delivered today at the IIF’s Global Outlook Forum. The event, held on April 23, 2025, in Washington, D.C., coincided with the International Monetary Fund (IMF) and World Bank Spring meetings, bringing together key figures in global finance and policy.
Bessent made the case for taking a fresh look at existing lending to China, the world’s second-largest economy. He contended that the World Bank should withdraw its financial backing. This means countries such as China that have achieved significant enough economic development. In his eyes, there really isn’t a good reason anymore to treat China like a developing country.
There is simply no merits-based justification for this continued, anti-competitive tortious lending. It wastes taxpayer dollars by redirecting them from more pressing needs and hinders the creation of private sector alternatives, Bessent stated. He emphasized that these practices penalize countries for not making progress towards their own economic self-sufficiency and job creation.
Bessent’s third point was that the World Bank must adopt explicit timelines for countries to leave its financial assistance programs. This is particularly true for those countries that have historically exceeded the rigid standards set forth. He continued, “The Bank has a responsibility to set specific timelines for graduation. Too many countries have been over-graduated beyond their criteria for graduation. It’s nonsensical to continue to treat China — the second-largest economy on the planet — as a ‘developing country.’”
Bessent admitted surprise at the speed and scope of China’s economic ascendance on the world stage. He said that this rise has damaged the majority of Western economies. It establishes an amazing moment of possibility for partnership. He seemed to welcome any moves that China might take to further integrate itself with the global economy. If China is to assume a leadership role, this realignment is imperative.
If they’re serious about rebalancing, let’s do that—in partnership. This is what Bessent promised – the idea that everyone could win through joint economic development agreements and other collaborative economic development tactics.
Bessent mentioned Ray Dalio, founder of Bridgewater Associates, who has been writing about China’s economic rebalancing. He described Dalio’s perspective on China’s rebalancing as a “beautiful rebalancing,” indicating a positive outlook on the changes occurring within China’s economy.