The Asian Development Bank (ADB), the leading multilateral financial institution in the Asia-Pacific rim region, is to unveil its new country strategy for China before the end of the year with a key stress on fighting poverty and pushing growth in the private sector in the world's most populous country.
The bank's top priority list for the coming several years focuses on hefty investment and some other concerns in the central and western part of the country, in accord with China's grand Western Development Program.
"ADB's lending to China in the public sector could total US$3.5 billion over the coming three years (2002-04), with 70 percent directed at the central and western provinces," said Bruce Murray, chief representative of the Bank's Resident Mission in China.
ADB has channeled a huge pool of funds to China, reaching about US$1 billion in each of the past several years, making the country one of the largest borrowers in the region.
And more funds will be invested in the country to foster its operational strategy of focusing on improving economic efficiency, promoting growth to reduce poverty in poor and inland provinces and improving the environment, said Murray.
"The People's Republic of China (PRC) has already built up a very close relationship with ADB since the PRC joined ADB in 1986," said Tadao Chino, president of the bank, during a recent interview with Business Weekly.
The remarks come just before the bank's 35th annual meeting, which is due to open in Shanghai, the financial hub of the country, late this week.
The proposed massive lending will be complemented by about US$40 million in technical assistance grants during the same period.
Holding 6.56 percent of the total shares, China is now the third largest shareholder of the 60-member multilateral financial giant with an overall capital subscription of US$2.86 billion.
"The PRC's contribution to ADB has been significant in improving ADB's overall operational policies," said Chino.
Murray estimated that the emergence and rapid development of China's private sector would become a key engine in fuelling the country's rapid economic growth and lifting employment levels in the years ahead.
In working towards such projections, loans and equity investments in the private sector will depend on market supply and demand, and this is likely to see a dramatic increase in the coming several years, Murray said, in another recent interview with Business Weekly.
"China has already become one of the best benchmarks among all the borrowers from the ADB, thanks to the good performance of investment projects in the country and on-time repayment of the loans," said Zhao Xiaoyu, China's executive director at the bank.
Started in 1986, the bank has a total of US$11 billion in funding in 88 projects in China.
In the bank's latest annual report published late last month, the bank depicts a rosy picture in China, claiming a number of key contributing factors are to help shape the country's future development agenda, including continued rapid economic growth, entry into the World Trade Organization, adoption of a regional development strategy focusing on the country's western regions and deepening economic reforms.
In 2001, the bank gave the green light to six loan projects in China totalling US$997 million, and it also provided 20 technical assistance grants totalling US$12.4 million.
Meanwhile, new plans from the bank are on the horizon to channel more funds into developing member economies to speed up their efforts to fight poverty and foster social growth in the entire Asia-Pacific region.
"We will pour more investment into the developing countries as we believe they are more in need of these funds," said Chino.
At the beginning of this year, the bank adopted a new organizational structure to better drive its mandate of poverty reduction and more effectively respond to the needs of its developing members.
The reorganization strengthened the country focus of ADB operations by establishing five regional departments, namely, the East and Central Asia department, the Southeast Asia department, the Mekong department, the South Asian department and the Pacific department.
The move is aimed at formulating and implementing programmes that integrate policy and sectoral considerations.
Prior to the move, the bank had only two divisions geographically, the east and west sub-regions.
"ADB will now be able to respond more quickly and effectively to its developing members," said Chino, adding that ADB staff will be better equipped to understand and deal with the complex, intra-regional and country specific dimensions of economic development and poverty reduction.
Chino further pointed out that one of the bank's major missions in the new century is to help developing member economies reduce poverty and improve living conditions and the quality of life.
Under such a vision, the bank has outlined its long term strategic framework for the coming 15 years, which is to achieve sustainable economic growth, all-around social development and good governance for effective policies and institutions.
Also on the bank's priority list are the promotion of the role of the private sector, support of regional co-operation and integration and the development of environmental sustainability in the region.
And ADB will forge a poverty reduction partnership agreement with each developing member in the region.
"The bank is expected to finalize the deal with China late this year," said Chino.
(China Daily May 14, 2002)
