Financial Services and General Government Appropriations Act, 2024

Floor Speech

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Mr. LUETKEMEYER. Mr. Chair, I am pleased to offer this amendment today with the gentleman from Arkansas (Mr. Hill) as a cosponsor, who was here a minute ago. I am confident it will garner bipartisan support.

My amendment would prohibit funds from this bill from being used to support a shareholding increase for China at the International Monetary Fund, the IMF.

The IMF is the world's lender of last resort and plays a critical role in ensuring multilateral cooperation on a wide array of financial matters.

As the IMF's largest shareholder, the U.S. is the only member to wield a veto over important decisions at the Fund. This includes decisions that change countries' shareholding weight at the institution.

Across administrations, the U.S. has advocated for the IMF to support fiscal responsibility among borrowers, responsible governance of exchange rates, and transparency in sovereign lending. These principles support global financial stability, but they have now been put at risk by China's dictatorship.

Put simply, the emergence of China as the world's largest official creditor has saddled countries around the world with opaque and onerous debt that the IMF has been called upon to resolve. None of this lending complies with international rules and norms like those established by the Paris Club and the Organization for Economic Cooperation and Development.

Although Chinese lending to developing countries has declined since its heyday in 2016, it still racked up $79 billion in commitments across the board in 2021. Much of this lending is shifting from infrastructure to emergency lending. In other words, China itself is adopting a role that the IMF has been traditionally playing.

Moreover, China's flouting of international lending standards mirrors its nontransparent management of its domestic currency, the renminbi. It is shocking, but undeniably true, that the IMF has limited insight into the exchange rate regime of the world's second largest economy. This is why my amendment is so important.

The IMF is finishing a review of its shareholding by the end of this year. China continues to argue that its shares, referred to as a quota at the Fund, don't accurately reflect its weight in the world economy. It has pushed and will continue to push for a greater say on the board of IMF.

My argument boils down to this: Shareholding at these institutions is not about the size of a country's economy, but, rather, its commitment to international rules and good-faith cooperation. As long as China dismisses every principle of the IMF's foundation, we cannot reward it with a stronger voice at the Fund. It would be absurd to increase its shareholding weight at the IMF when it is refusing to restructure much of its predatory lending to the Fund's borrowers.

The Treasury Department represents us at the Fund, and I am pleased that it has conveyed Congress' skepticism toward a quota increase for China. However, there is no formal agreement at the IMF yet. This amendment will help ensure that boosting China's influence is off the table. The amendment also sets a marker for future shareholding reviews, where my colleagues on the Financial Services Committee and I will insist on real accountability from Beijing.

China would have us believe that the U.S. threatens global cooperation by denying it a more prominent seat at the table, but the opposite is true. It is China's disregard for transparency making our opposition to its influence at the IMF and other multilateral organizations absolutely vital.

I would add that China's abuse of human rights at home, including its genocide of the Uyghurs is yet another reason why legitimizing Beijing at an international institution is unacceptable.

We must draw a line in the sand, which is what my amendment does.

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Mr. LUETKEMEYER. Mr. Chair, I would just argue that the Treasury Department is in charge of various activities with regard to the governance of these boards, whether the World Bank, IMF, et cetera. These are entities that we fund. We are on these boards, and these boards direct funds that we have put in these entities. It is our job to make sure that the Treasury Department does its job, which is to monitor this, be on the boards, behave in a responsible fashion, and also to stop the nonsense going on around the world with bad actors such as Iran and this situation where I am talking about here with China.

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Mr. LUETKEMEYER. Mr. Chair, I yield back the balance of my time, as well.

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