The World Bank unveiled an ambitious plan of lending to China that highlights
environmental destruction and social inequality as "critical" challenges for the
Skyscrapers rise above Beijing as the morning
sun rises. The World Bank unveiled an ambitious plan of lending to China
that highlights environmental destruction and social inequality as
"critical" challenges for the booming
The plan envisages annual assistance of 1.5 billion dollars for the next five
years, making China the global lender's biggest aid recipient along with India.
The money would be devoted largely to the inland provinces that have lagged
the breakneck growth enjoyed by coastal cities, in accordance with Beijing's own
plan to spread the boom more widely.
"The new 'Country Partnership Strategy' recognises 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," World Bank president Paul Wolfowitz said.
Despite its startling progress of the past two decades, China still has more
than 135 million people surviving on less than a dollar a day.
Many observers say that without a fairer distribution of income, and a
serious effort to protect the fast-degrading environment of its cities, China
risks losing some of its gains.
David Dollar, the World Bank's 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," he told reporters. "It raises
whole new environmental issues. So urban management is a critical issue for
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,
China's leaders do recognise the problem, he said, describing tough new
targets to reduce gas emissions and improve water quality.
After the environment, inequality and "social exclusion" are "the next
biggest problem" for China's long-term development, Dollar said.
The country's average gross domestic product per head is 1,740 dollars. But
in cities like Shanghai, that rises to 8,000 dollars.
Cities inland have suffered from corruption, red tape and antiquated
industries. On the land, meanwhile, there remain 800 million farmers trying to
eke out a living in often desperate poverty.
Finding more even patterns of development is the "critical next phase for
growth" in China, along with moving away from its export model of expansion to
one more reliant on domestic growth, Dollar said.
In its newly adopted partnership strategy, the World Bank plans to offer its
cash and expertise in five key areas:
-- Integrating China into the world economy, through encouraging Beijing to
play a deeper role in bodies such as the International Monetary Fund and the
World Trade Organisation.
-- Reducing poverty and inequality, by expanding basic social services,
particularly in rural areas.
-- Managing scarce resources and environmental challenges. Key to this will
be raising the price of petrol, which Dollar said is as cheap in China as it is
in Saudi Arabia, thanks to heavy government subsidies.
-- Deepening financial markets, by increasing access to services for small
and medium-sized companies.
-- Improving government and market institutions, through public-sector
reforms to make bureaucracy more efficient.
Dollar, however, said China was right to resist US calls to rapidly throw
open its currency to market forces. Premature reform would be destabilising, he