The World Bank Tuesday set out a new five-year plan for its development projects in China, lending up to 1,5 billion US dollar (henved 9 milliarder KR) per year and focusing on poverty reduction as well as easing the environmental and social fallout of the huge countrys economic boom, reports the World Bank press review.
The Banks Board of Directors backed the Country Partnership Strategy for China for 2006-10 and endorsed a range of goals topped by China’s further integration into the world economy.
The plan, which is synchronized to run in parallel with China’s own five-year economic plans, had also been approved by the Chinese government, the Bank said adding, that continued involvement in China, despite the economy there having mushroomed into the fourth largest in the world, was rooted in a need for World Bank expertise in dealing with what was still a mammoth development task.
Five areas of focus includes
– reducing internal and external trade barriers;
– promoting balanced urbanization and sustaining rural livelihoods;
– projects to cut air pollution, conserve water use and optimize energy consumption;
– developing the financial system and
– reforming key institutions.
The Bank said about 70 percent of the proposed projects would be in the poorer inland provinces of China. The International Finance Corporation (IFC), – an arm of the Bank – expects new investments to exceed 500 million US dollar per year.
“The new Country Partnership Strategy recognizes clearly that helping China to strengthen its economy, manage its resources and environment, and improve governance, are important not only for the Chinese people but also for people all over the world”, Bank president Paul Wolfowitz said in a statement.
David Dollar, the World Banks Country Director for China, said that with 10 million people leaving the countryside every year to hunt for work in the big cities, the pressure on strained urban infrastructure is intensifying.
– City life is much more energy-intensive. It raises whole new environmental issues. So urban management is a critical issue for China, he explained.
China is home to 20 of the 30 cities in the world with the worst air pollution, and that risks getting worse as more and more Chinese buy cars, Dollar noted.
– If China does not control emissions the whole world will suffer for that, he said, adding:
– Many of the countrys waterways are clogged with industrial and household waste. Chinas leaders do recognize the problem, he said, describing tough new targets to reduce gas emissions and improve water quality.
Dollar further said that “a big change in Chinas yuan exchange rate could have unpredictable effects on the countrys booming economy and Beijings cautious approach to currency reform is understandable”. He noted that China is still a developing country with a weak financial sector and a lot of weak institutions.
– For the exchange rate, I have a lot of sympathy for the Chinese government approaching that cautiously, he said.
– I agree with the macro-economists who think that it is in China’s interests to allow some appreciation of the currency but I respect the government wanting to make that move gradual. A big change in the exchange rate really could have unpredictable effects on economic growth, he said.
The plan to issue up to 1,5 billion dollar in loans puts China alongside India as the Banks largest beneficiary.
Kilde: www.worldbank.org
