Hugo Chávez, resplendent in crisply pressed fatigues and paratrooper boots with red shoelaces, had a very special guest. Meeting him that day in mid-September 2011 in Caracas was the world's most powerful banker, who had lent Chávez's government at least $40 billion over the four years from 2008 to 2012, or about $1,400 for every man, woman, and child in Venezuela.
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The guest, stooped and looking older than his 66 years, drank chrysanthemum tea, staring across the table at Chávez, bald from his chemotherapy treatments. He handed the Venezuelan president a 600-page book filled with recommendations on how Chávez should run, manage, and build ports, roads, and railroads.
What bank in this day and age can lend so much money to one of the world's riskiest regimes, a country with two centuries of credit defaults, and then tell its debtor how to spend the proceeds of the loan?
Not Goldman Sachs. Chávez's banker had governmental ties that the legendary New York firm, incubator to former U.S. Treasury secretaries Hank Paulson and Robert Rubin, could only dream of. The man sitting across from Chávez was the Chinese equivalent of royalty. His father was one of the founding fathers of the People's Republic of China.
Not the World Bank. That Washington-based product of Pax Americana had a loan book only a fraction of the size of this man's company, the world's biggest policy bank. Chávez's Chinese bank had bragging rights over the World Bank as well, having helped craft the biggest and arguably most successful poverty-reduction program in history, which saw hundreds of millions of Chinese peasants become middle-class city dwellers. The bank has funneled billions of dollars into Africa, stoking Ethiopian exports and reviving Ghana's railroad network after decades of neglect.
Not the Fed. The U.S. Federal Reserve might have trillions of dollars at its disposal, and it might have staved off a depression in the wake of the 2008 financial meltdown. But when it comes to results, Chávez's bank arguably had an even more impressive record: It devised a system to fund local infrastructure projects that helped China sail through the global financial crisis while the United States and Europe stumbled.
Chávez's guest was Chen Yuan, chairman of China Development Bank (CDB) and the world's most powerful banker. You can't buy shares in CDB; it is wholly owned by the Chinese government. But it would be a mistake to call it a government bureaucracy that is at the state's beck and call. It is a bank, claiming the lowest nonperforming-loan rate of any major Chinese lender and having a reputation for hardball negotiations with both domestic and foreign clients. While other low- to middle-income countries have development banks that help fund their national companies and bolster economic growth to catch up to more advanced powers, the scale of CDB and the amount it can lend make it a different animal.
But the world's most powerful bank? Yes. Let us count the ways.
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