No More Debt Relief to China Act
- Sponsor
- Rep. Perry, Scott [R-PA-10]
- Committees
- Financial Services Committee (primary)
- Last action
- Jul 15, 2026
Bottom line
The bill seeks to compel international financial institutions to cease any actions that directly or indirectly provide debt relief to China, under penalty of US withdrawal, aiming to counter China's financial influence.
What it actually does
This bill mandates the immediate withdrawal of the United States from the International Monetary Fund (IMF), the World Bank Group, or the Asian Development Bank (ADB) if these institutions provide any debt relief to the People's Republic of China or if their debt relief to other countries aids China's own debt relief efforts. It also directs the US Executive Director at the IMF to oppose such relief and requires monthly reports on financial transactions from these institutions to Congress.
Proponents argue
Proponents would argue this bill protects US taxpayer dollars from being indirectly used to support China's economic interests or its Belt and Road Initiative, ensuring that international financial institutions do not facilitate China's debt diplomacy. They might emphasize holding China accountable for its lending practices and preventing it from benefiting from global financial safety nets while it acts as a major creditor itself.
Opponents contend
Opponents might argue that withdrawing from these institutions would diminish US influence on global financial governance, potentially harming US economic and strategic interests. They could contend that such a move would isolate the US, weaken the global financial architecture, and make it harder to address international financial crises, including those involving China's debt. They might also highlight the potential for unintended consequences, such as other countries stepping in to fill the void left by US withdrawal.
The bill is very short and easy to read, allowing ample time for detailed consideration of its significant implications.
Section 2(a)(1)
Mandatory US Withdrawal from IMF for Direct China Debt Relief
This provision requires the US Secretary of the Treasury to immediately notify the International Monetary Fund (IMF) of the United States' withdrawal if the IMF provides any form of debt relief to the People's Republic of China for any loan it has made to China. The withdrawal process must be completed within 60 days.
Supporters argue
Supporters argue this provision ensures that US taxpayer funds, channeled through the IMF, are not used to bail out or provide financial relief to China, which is itself a major global creditor. They contend it holds China accountable for its own lending practices and prevents it from exploiting international financial safety nets.
Critics contend
Critics would argue that withdrawing from the IMF would severely undermine US global financial leadership and its ability to influence international economic policy, including efforts to manage global debt crises. They might also suggest it could lead to other powers, like China, increasing their influence within these institutions.
Tradeoffs
The tension lies between the desire to prevent China from benefiting from international debt relief mechanisms and the potential cost of losing US influence and participation in critical global financial institutions.
Section 2(a)(2)
Mandatory US Withdrawal from World Bank Group/ADB for Indirect China Debt Relief
This provision mandates US withdrawal from institutions within the World Bank Group or the Asian Development Bank if they provide debt relief to any country, and if that relief is determined to have aided the People's Republic of China in providing its own debt relief to that same country. This targets situations where IFI relief might free up a country's resources, allowing it to repay or receive relief on Chinese loans.
Section 3
US Opposition to IMF Debt Relief for China
This section directs the Secretary of the Treasury to instruct the United States Executive Director at the International Monetary Fund to use the US voice and vote to actively oppose any provision of debt relief by the IMF to the People's Republic of China, as described in Section 2(a).
Section 4
Monthly Reporting on IFI Financial Transactions
This section requires the Secretary of the Treasury to obtain and transmit to Congress monthly reports from the IMF, World Bank Group, and Asian Development Bank. These reports must detail all financial transactions made by each institution, specifically including any funds provided to the People's Republic of China or any debt of China that has been forgiven.
States that it is the policy of the United States that Congress has the authority to direct the actions of the United States in any international financial institution.
Section 5
Why it matters:This is standard legislative practice for policy statements, but its placement at the end could lead a casual reader to overlook its significance in asserting congressional prerogative over executive branch foreign policy.
Case for: Supporters would argue this provision reinforces the constitutional role of Congress in foreign policy and ensures that the executive branch's actions in international bodies align with legislative intent, particularly given the significant financial commitments involved.
Case against: Critics might argue that such a broad assertion of congressional authority could complicate the executive branch's ability to conduct agile and effective foreign policy, especially in multilateral settings where rapid decision-making is often required.
Estimated impact: Clarifies and asserts the legislative branch's view on its authority over US engagement with IFIs, potentially leading to future legislative actions or executive-legislative branch tensions.