Basic issue here, as I read in the FT, is that the WB is upset with Chinese banks for lending to African and other countries without regard for human rights records or their debt history. The fun part is that the critic if, of course, Paul Wolfowitz, head of the WB and (as he will never live down) one of the architects of the Iraq War when he was Deputy Defense Secretary during the Bush Administration.

First issue:

Mr Wolfowitz said big Chinese banks ignored the so-called “Equator Principles”, a voluntary code of conduct pledging that projects financed by private bank lending met certain social and environmental standards. The guidelines were launched in 2003 under the aegis of the International Finance Corporation, the private sector arm of the World Bank. Almost 80 per cent of commercial banks worldwide have adopted the guidelines.

Fair enough, Chinese banks are new to the international lending game and may not be on the same page as the WB and other lenders. Wolfowitz admits as much.

Second issue:

The World Bank president said he was also concerned about lending by China, India and Venezuela to poor countries that had benefited from debt relief. “There is a real risk of seeing countries which have benefited from debt relief become heavily indebted once more.”

It's been a struggle for all parties involved to get successful debt relief for many of these countries, so the possibility that new lenders will swoop in and create the same set of conditions that led to the original problem must be completely disheartening to the WB and others. Again, fair criticisms.

So Wolfowitz, playing the role of internationalist/idealist, is butting heads with Chinese practices that are partially driven by commercial interests and, even more so, motivated by realist foreign policy created in Beijing. The Chinese charm offensive in many of these countries has been followed by lending, foreign investment, etc. Perfectly understandable from a realist point of view. Perfectly exasperating if you're a neocon or idealist. In other words, Wolfowitz is being true to form, and what many folks did not understand during the run-up to the Iraq War is that a lot of the intellectual push for this within the U.S. did not come from the old line realist school within the Republican Party, but from a new breed of folks that are pushing some very big ideas into the international arena (stuff like democracy, self-determination and human rights). Backing up these principles with military force is a bit too much for many of us to swallow, of course.

So if you hear next month that the World Bank is building up in-house military capabilities, I would start to get really worried.