(Ecofin Agency) - The United States of America will soon set a development finance institution, able to invest $60 billion in developing countries, to counter China’s growing influence over those countries, the Financial Times revealed on September 23. This institution baptized International Development Finance Corporation/ US IDFC is created in a context of toughening economic warfare between the two superpowers.

The Overseas Private Investment Corporation (OPIC), US current development finance institution will be “folded” with the one to be created and authorized to invest under its wings. Currently, OPIC can only invest in debt. Such a situation places it in an unfavorable position compared to European and Chinese development finance institutions.

In a statement quoted by the UK media, Ray Washburne (photo), chief executive of OPIC, declares that the new institution will be put on “an equal footing with other DFIs”.  

The official also commented that China has been waging economic warfare with the USA, using its portfolio. He said that by using the “loan-to-own programmes”, China has been “creating countries that have the shackles of debt around them”, adding that this amounts to economic warfare.

According to sources close to the case quoted by the Financial Times, US IDFC is presented by the American administration as the spearhead of their fight against China’s diplomacy based on debt.  

Last August, sixteen senators wrote to Steven Mnuchin, the United States Secretary of the Treasury, complaining about the fact that IMF is most of the times obliged to save some countries whose public finance is affected by “predatory Chinese infrastructure financing”.

They also expressed their concerns that thanks to the loans being graciously granted by China to Djibouti, the former could take control of the main port of Djibouti where the USA, China, Japan, and France have set military bases.

Let’s remind that the US IDFC is being considered at a time when China has multiplied its investments in developing countries, Africa particularly. On September 3, 2018, for instance, China announced that it would provide an additional $60 billion to African countries. This fund comprises credit lines amounting to $20 billion, $15 billion as grants, interest-free and concessional loans, $10 billion as dedicated fund and $5 billion to support imports from Africa.

This is to say that Africa is increasingly becoming an economic war battlefield for China and the USA.