The Asian Development Bank (ADB) plans to increase its support to China and lend it up to 1.5 billion US dollars annually over the next three years, the bank announced Tuesday.
According to the Country Strategy and Program (CSP) for 2004-2006 endorsed on Tuesday by ADB's board of directors, about 84 percent of lending is expected to be for projects located in the central and western regions where most of the poor live, the bank said in a statement.
Despite consistently high overall national economic growth, per capita GDP in the interior regions is less than half that along the coastal areas. There are also wide gaps in health and education indicators, as well as the level of infrastructure such as roads, railways, power, communications, and water supply.
The transport sector dominates the lending, accounting for 61 percent of the program. This reflects the central government's high priority in developing an extensive and integrated transport network at this stage of development.
The ADB will explore possibilities to support more projects to promote regional cooperation, which will account for 12 percent of the lending, backed by regional technical assistance.
In the financial sector, the ADB will support investment funds for small and medium enterprises, agribusiness, the environment, and instruments to address non-performing loans. Trade finance and housing finance are potential new areas to be explored.
The loans will be complemented by an annual technical assistance (TA) program of US$14 million. The TAs will be used to prepare projects and develop knowledge-based products, addressing such themes as poverty reduction, governance, the rule of law, private sector development and environment improvement.
"Since the last ADB strategic program for China was prepared in 1997, the country has made exceptional economic progress," says Joseph Eichenberger, ADB's Vice President. "Economic growth must increasingly be complemented by social development and more progress in areas such as health, education and poverty reduction."
The CSP aims to promote economic growth by giving the poor greater access to prosperity and re-emphasizes the need to reduce regional disparities. The increase in lending for 2004-2006,from an annual average of 1 billion dollars during 1998-2002, is appropriate for a large country with sound macroeconomic fundamentals, strong absorptive capacity, and proven record of good project implementation, the CSP says.
(Xinhua News Agency November 5, 2003)