The President of the World Bank Group, Mr. James D. Wolfensohn,
today praised China for leading the world in reducing poverty, and
promised strong and continued support in the years ahead. Speaking
at the end of eight days in China, Mr. Wolfensohn said the progress
since his last visit in 1995 was "impressive, and remarkable in
many sectors," and a strong signal to the world that with the right
policies and determined leadership, real inroads could be made in
reducing poverty. His visit covered some of the poorest areas in
the west and the wealthiest in the south and east. He met with
senior leaders, including President Jiang Zemin, Premier Zhu
Rongji, Vice-Premier Wen Jiabao, and Finance Minister Xiang
Huicheng. He also met with local families, members of civil
society, the private sector, international agencies, and local
representatives of other governments.
"The picture that emerges is one of enormous momentum, of positive
change in so many areas and a willingness to confront and resolve
the hard issues of development," Mr. Wolfensohn said. "In a
relatively short time, China has emerged as a country of truly
global stature, having joined the World Trade Organization,
strengthened ties with ASEAN and won the right to host the 2008
Olympics. This is a more dynamic, more confident China -- and
rightly so. The simple fact is that more than 250 million people in
the past 20 years have been lifted from poverty here. The problems
confronting China have not been totally overcome -- far from it --
but the magnitude of this achievement in a single generation is
such that other countries should learn from it."
Mr. Wolfensohn said that in meetings with President Jiang and
Premier Zhu, as well as with other ministers and members of the
National People's Congress, a consistent theme was raised:
leveraging the World Bank Group's resources to pilot reforms and
initiatives which could be scaled up to meet China's needs. "If
there is any country where scale is important, it's obviously
China, and I am delighted that the demand for our support in
piloting change is so strong. This is how we can, with relatively
modest financial support, have a major positive impact on the tens
of millions of Chinese who need assistance."
Mr. Wolfensohn said that "even with the successes of the past 20
years, the picture in China today is also one of real needs and
challenges, as almost everyone I have met this week has reminded
me. The acute poverty in the western regions appears even starker
in contrast to the boom taking place in the east. We need to
remember that for every Shanghai, there are hundreds of rural areas
in China where people live on less than a dollar a day. The poverty
challenge is vast. To see it first hand is to understand the great
need for the World Bank and China to work even more closely
together. We have to find ways, beyond even what we have done over
the past 20 years, to assist the desperately poor to have a chance
at a better life, a chance to share in the growth that has
transformed so much of this country in the past generation. The
World Bank looks forward to supporting efforts of the Government to
alleviate poverty in the western provinces."
Mr. Wolfensohn identified several areas in which China needed to
make significant progress in the years immediately ahead to secure
the benefits of recent years:
- Focusing on the poorer areas. Income disparities and
lack of opportunity are marginalizing millions of people, mainly in
the remote, western regions. More concerted efforts will need to be
made to provide sustainable livelihoods for these people, in a way
that also protects their cultural identity. This will mean not just
greater investment in rural development, health, education, and
basic infrastructure, but also finding ways to provide financial
assistance -- perhaps through micro-credit schemes -- to small
businesses and farmers. These efforts have been assisted recently
by an innovative financing arrangement with valuable support from
the UK Department for International Development (DFID).
- Major structural reforms associated with the continued
transition to a more open, market-driven economy. Non-performing
loans held by state banks, the drain of loss-making state-owned
enterprises, unfunded pension systems, inadequate property markets
and the relatively weak domestic financial system -- these are
among the obstacles China must continue to deal with as it prepares
for full compliance with WTO requirements in 2007.
- Continuing to provide greater space for the private
sector to flourish. The private sector needs to continue to
grow and develop if China is to sustain high growth rates in the
years ahead without reliance on Government spending. Mr. Wolfensohn
said that the International Finance Corporation -- the World Bank's
private sector arm -- was ready to expand its work to assist in
this vital area. He cited other issues needing attention to create
a better investment climate, including progress in improving
transparency and accountability in businesses, reducing corruption,
and upgrading the legal and judicial system.
- Stepping up efforts to restore and protect the natural
environment. In urban and rural areas, the environment has
suffered badly through inadequate planning, protection and
enforcement. The clean-up task is considerable; it will take time
and cost a great deal, and in some cases, the situation is actually
deteriorating even now. But in a number of other cases, China has
shown a remarkable ability to turn things around, in providing
cleaner water in Shanghai, or in restoring barren landscape in the
Loess Plateau. China will benefit in human terms and financial
terms if the environment improves.
"The opportunities and needs are considerable; the capacity of the
people we met is remarkable; and the sense of momentum is
unmistakable," Mr. Wolfensohn said. "The Bank has been proud to be
associated with the development success of China these past 20
years. We have learned a great deal from the relationship, and we
look forward to working closely with the Government, with other
donors and partner agencies, with civil society and with the people
themselves to make the future even brighter."
The Visit in Detail
During his eight-day visit, Mr. Wolfensohn first made a field visit
to a number of development projects supported by the World Bank in
Yunnan, Sichuan and Shanghai. On his first stop in Lijiang, he saw
a Bank-supported Earthquake Rehabilitation Project that financed
the restoration of the Mu Mansion, a World Heritage Site, as well
as residences and service facilities damaged by the earthquake in
1996.
In
Xichang, Sichuan Province, Mr. Wolfensohn visited a Yi nationality
village and talked to farmers who participated and benefited from
the Bank-supported Anning Valley Agricultural Development Project.
He also visited a forest plantation run by a group of four farmer
households, with funding support from the China Forestry
Development in Poor Areas Project.
In
Chengdu, capital of Sichuan and a gateway to the western provinces,
he launched the International Finance Corporation (IFC)-managed
China Project Development Facility, which is co-financed by the
governments of the UK, Australia and Switzerland. The facility aims
to catalyze support to small and medium enterprise managers in the
Western Region. Mr. Wolfensohn exchanged views on small business
development, and used the opportunity to learn about the needs and
concerns of private business in poorer regions. He was also shown
an IFC-supported cement factory, which is supported 75 percent by
Lafarge and 25 percent by the local Dujiangyan Building Materials
Corporation. The plant brings advanced technology and high
environmental standards to a major industrial undertaking. Also at
Dujiangyan, Mr. Wolfensohn visited a massive 2,000-year-old
irrigation system, which is a candidate for World Heritage listing.
At the same time, Mrs. Wolfensohn visited a school that has been
active in raising awareness for the prevention of HIV/AIDS. Mr. and
Mrs. Wolfensohn also visited the Southwest Minorities University
where they expressed strong support for efforts to provide
education opportunities for minority students.
In
Shanghai, Mr. Wolfensohn saw the tremendous changes that have taken
place in the city -- especially in Pudong -- in recent years. After
a tour of the Shanghai Urban Planning Exhibition Center, he visited
a crowded housing area that is due for renewal, which may be
supported partly by the proposed Shanghai Urban Environmental
Adaptable Program Loan (APL). This would be the Bank's first APL in
China. Discussions with residents helped him get a better
appreciation of the expectations of the residents who will benefit
from the upgrading. This project will introduce to Shanghai a set
of world class methods and technologies for the management of urban
environmental issues and the financing of urban infrastructure.
Banking system reforms in China include the development of private
commercial banks, and IFC is the first direct foreign investor in
China's banking sector. Mr. Wolfensohn met a group of bankers in
Shanghai to learn about their successes and remaining challenges.
This group included officials from the People's Bank of China
Beijing and Shanghai, as well as leaders from Bank of Shanghai,
Nanjing City Commercial Bank, Xian City Commercial Bank, and
Minsheng Bank. He discussed with them a broad range of issues such
as the role of IFC in China's banking sector, corporate governance
in the financial sector, the competitive strategies employed by
banks, and their expectations regarding potential foreign
partners.
Mr. Wolfensohn exchanged views with the governors and
vice-governors of Yunnan and Sichuan, and with the Mayor of
Shanghai, on the World Bank Group's country program.
In
Beijing, Mr. Wolfensohn met with President Jiang Zemin and Premier
Zhu Rongji. He discussed with them economic developments in China
and abroad, China's needs and challenges, and ways in which the
World Bank Group can assist. Mr. Wolfensohn reconfirmed the
commitment of the Bank Group to help China meet the challenges
emerging from closer integration in the global economy, especially
in assisting disadvantaged groups and regions. He also met with
Minister of Finance Xiang Huaicheng, Chairman of the State
Development and Planning Commission Zeng Peiyan, the Minister of
Education, Vice-Minister of Health, Minister of Water Resources,
Vice-Minister of Communications and Administrator of the State
Environment Protection Administration. At these meetings, he was
able to reinforce the very useful partnership and dialogue that
China and the World Bank Group have had since active collaboration
on development issues began in 1980. He received useful suggestions
on the orientation of the future partnership with the Chinese
government and Chinese people.
Together with Vice Premier Wen Jiabao, Mr. Wolfensohn opened the
first Annual Forum of the APEC Finance and Development Program,
which is jointly-sponsored by the Ministry of Finance and the World
Bank. He congratulated the Government for taking the lead in
establishing the AFDP, and for having the foresight to pursue the
overarching theme of AFDP: improving financial intermediation for
economic growth, development and stability. Emphasizing the
importance of a sound financial system in his address, he said, "a
sound and robust financial system is fundamental to growth and
poverty alleviation, employment creation and economic stability.
Good financial systems promote these outcomes, weak systems
threaten them." World Bank Senior Vice President and Chief
Economist Nicholas H. Stern also attended the Forum, which focused
on three themes: financial sector development and growth, lessons
and prospects for financial restructuring, and achieving financial
stability.
Mr. Wolfensohn also gave a keynote speech at an International
Conference on Corporate Governance which was co-sponsored by the
Development Research Center of the State Council, the National
Accounting Institute, the World Bank and IFC. He spoke to an
audience of senior government policymakers, donor agencies,
academics, enterprise executives and the press at the conference in
Beijing. The conference also show-cased the Global Development
Learning Network (GDLN), a fully interactive, multichannel distance
learning network with a mandate to serve the developing world. This
enabled a hookup with conference participants Ningxia, where the
first node of the Beijing hub of GDLN has been established, with
financial assistance from the Australian Government and AusAid. At
the conference, Mr. Wolfensohn said: "The real challenge for this
country and for this region, and for many other regions, is simply
to do what we know is good sense. It's taking the step to clean up
the banking system, to clean up corporate governance, to act with
integrity, to institute laws and regulations which are clear and
simplified and understood by the accounting profession, by the
legal profession. And if we do that, the future is ours." A new
World Bank and IFC-sponsored study, titled China: Corporate
Governance and Enterprise Reform, was released at the
conference.
Mr. Wolfensohn attended a ceremony to celebrate China's joining the
Development Gateway Foundation as a Founding Member. Together with
Minister of Finance Xiang Huaicheng, he signed a Memorandum of
Understanding to initiate this process. And, together with the
Minister of the State Council Information Office Zhao Qizheng, he
launched the China Country Gateway, part of China's contribution to
the Foundation. The purpose of the Development Gateway portal is to
provide access to and sharing of critical knowledge and experiences
on development. It represents a collaborative e-space for
communities, organizations, and individuals to build partnerships,
share ideas, and work together to reduce poverty. The World Bank
has been a Founding Member of the Foundation since July 2001, and
has played a major role in establishing the Foundation.
Mr. Wolfensohn also met with senior leaders of the National
People's Congress (NPC), China's parliament, including Vice
Chairman Cheng Siwei of the NPC Standing Committee, Chairman Chen
Guangyi of the NPC Financial and Economic Committee, Chairman Gao
Dezhan of the NPC Agriculture and Rural Affairs Committee, Vice
Chairman Hu Guangbao of the NPC Law Committee, Vice Chairman Wang
Jiaqiu of the NPC Education, Science, Culture and Health Committee,
and Wang Xianjin, Member of the NPC Environmental and Resources
Protection Committee. Mr. Wolfensohn received helpful suggestions
on possible World Bank Group assistance on policy analysis and
advice.
On
several occasions during their 8-day visit, Mr. and Mrs. Wolfensohn
met with representatives of civil society, including academics,
researchers, NGO leaders, and women activists. Mr. Wolfensohn was
very pleased to see that civil society is playing an increasingly
important role in general development, and that participatory
project approaches that include the views of affected people are
being accepted and introduced. He offered the World Bank Group's
assistance in accelerating this process.
Mr. Wolfensohn gave a major speech to over 600 students and faculty
at Peking University. In the speech he emphasized the need for a
partnership between developing and developed countries and
contributions from both in achieving the millennium goals. He also
spoke about the challenges facing China in completing the remaining
reforms that would establish it as an essentially market-based,
modern, and globally integrated economy. He identified reforms of
the financial sector and state enterprises as the most pressing. He
also stressed the need to confront the new challenges emerging from
joining the WTO: enhancing governance, alleviating social
pressures, mitigating environmental degradation, and strengthening
infrastructure while promoting innovation and change. He encouraged
China to increase efforts to embrace the potential of the
"Knowledge Economy" and pledged World Bank Group support to
deepening collaboration on this front. "Across the world, we must
educate our children -- students such as yourselves who are
standing before me today -- to be global citizens with global
responsibilities," he said. "We must celebrate diversity, not fear
it. We must tell our children to dare to be different --
international, intercultural, interactive, global." During this
visit, Mrs. Wolfensohn was able to visit a number of schools and
universities and discussed with policymakers and education
specialists issues related to education development and reform in
China.
Mr
Wolfensohn was accompanied on his visit by the Regional Vice
President for East Asia and the Pacific, Mr. Jemal-ud-din Kassum,
Country Director for China, Mr. Yukon Huang, East Asia Director for
IFC, Mr. Javed Hamid, and the IFC China Country Manager, Ms. Karin
Finkelston.
(china.org.cn May 30, 2002)