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World Bank's Board of Executive Directors yesterday approved a US$20 million loan to support China's economic reform. It is the fifth in a series of technical cooperation projects that the Bank has funded since 1983.

The China Economic Reform Implementation Project aims to significantly increase the adoption and use of sound reform and development strategies, policies and plans in China.

This will be achieved through institutional capacity building through a series of technical assistance subprojects tailored to address specific challenges facing the government at the national and sub-national levels. The project has a strong focus on learning of new knowledge as well as on replication and scaling up efforts that work. 

"The key words to describe this project are "reform and development" and "technical assistance," said Chunlin Zhang, World Bank task manager for the project. "It is designed to assist government decision makers who are determined to implement a reform and development agenda in their departments or regions, but face a lack of technical knowledge and capacity. In supplying the knowledge and capacity they need, the project is driven by real demand and focused on achieving results. "

Subprojects will focus on a range of objectives reducing poverty, inequality and social exclusion; improving public and market institutions; managing scarce resources and environmental challenges; financing sustained and efficient growth; integrating China into the world economy; or promoting achievement by China of the Millennium Development Goals.

The Department for International Development (DfID) of the Government of the United Kingdom has approved a grant of 5.71 million pounds to co-finance this project. It aims to support sub-national governments implementing projects focused on poverty reduction and the achievement of the Millennium Development Goals.

"DFID grant funding will enable the poorer parts of China to benefit from the access to external expertise this project will support, and so help promote achievement of the more equitable and harmonious society that is the objective of the new 11th Five Year Plan". DFID's Deputy Representative Chris Athayde said.

The project will be implemented by Ministry of Finance of China. Central government departments and local governments can apply for subproject funding from Ministry of Finance any time during the period of project implementation (2006-2011). The proceeds of the loan and grant will finance consulting services, workshops, training, study tours and other capacity building activities. The International Department of Ministry of Finance will issue detailed guidelines for preparation of subproject proposals. Subprojects will be required to produce "strategies, policies, implementation plans and mechanisms" that may significantly contribute to the achievement of a project objective, and to be clearly defined in light of the practical challenges that the subproject is designed to address. 

The US$20 million loan from the International Bank for Reconstruction and Development is repayable in 20 years with a five-year grace period.

(China.org.cn April 12, 2006)