Multilateral development banks (MDBs) play an important role in world economic processes and global economic governance. Since the establishment of the first multilateral development bank — the International Bank for Reconstruction and Development (IBRD) — MDBs have emerged in three waves, each time as a response to the major changes in the world arena. The creation of the New Development Bank (NDB) and the Asian Infrastructure Investment Bank (AIIB)represents the third and latest wave of MDBs. These new development banks have arisen as a consequence of an historic shift in global economic power from developed countries to emerging economies and more specifically of an increase in China’s economic might. This article traces the evolution of China’s participation in MDBs, characterizes various forms of China’s engagement with MDBs at specific periods of history, and explains Beijing’s motivation in establishing new MDBs. During almost 40 years of interaction with the multilateral development banks, China has made a great leap forward from large borrower to creditor status, from ordinary member to the initiator and creator of new MDBs under its auspices. This article identifies the scale, composition and dynamic of MDBs’ assistance to China. It points out that despite its eye-catching economic achievements, China remains one of the largest borrowers from MDBs. Yet, in the process of China’s participation in MDBs there have been two turning points: in 2004–2005 when China turned to become a creditor, and during the 2008 global financial crisis when China set a course for promoting the reform of global governance system and creation of new China-dominated financial bodies. The creation of new financial institutions is evaluated in the article as indicating Beijing’s foreign policy ambitions to assume a leadership role in the global economic architecture, while the fact that China is acting both as a creditor and a borrower in MDBs reflects the incomplete nature of China’s modernization efforts and its elevation to the status of a great power with global outreach. Overall, the establishment of new multilateral development banks is evaluated in the article as effective in promoting Beijing’s efforts to solidify its position in the world economy and the international system.