Countries and Regions

	Table of Contents
p. 8 of 21 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies IV. Subregional Economic Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - People's Republic of China

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II. Country Operational Strategy

51. ADB’s Country Operational Strategy (COS), which was informally discussed by the Board in February 1997,. ADB’s strategy has emphasizes three broad objectives: (i) improving ements in economic efficiency; (ii) promoting on of growth to reduce poverty in poor inland provinces; and (iii) enhancing environmental protection and natural resource management. The pursuit of these three broad objectives will help maximize employment creation, correct factor market distortions, address market failures of rapid growth by spreading the benefits of growth more evenly, and reduce environmental degradation in PRC.

52. Until 1995, around two thirds of the location-specific ADB projects were in the wealthier coastal areas and one third were in the poorer central and western areas. The goal of both the Government and ADB is to reverse these percentages so that ADB projects help promote growth in the poorer inland provinces. In line with this strategy, most projects that are location-specific during the period 2001-2003 are located in the poorer central and western regions (65 percent by number and of projects; 76 percent by amount of lending).

53. Within the framework of the COS, ADB operations will focus on: (i) strengthening macroeconomic management and the policy, legal, and regulatory framework necessary to support the implementation of market-oriented reforms; (ii) addressing issues and constraints primarily in three key sectors: physical infrastructure (covering energy, transport, water supply and wastewater); finance and industry; social security; and agriculture and rural development; and (iii) promoting sound environmental management to ensure sustainability. To achieve macroeconomic stability and enhance investment efficiency, the Government will need to continue to: (i) develop greater expertise in the use of effective fiscal and monetary policy tools; (ii) establish efficient financial markets; (iii) accelerate enterprise reforms and the development of a social safety net; (iv) strengthen the legal and regulatory framework; and (v) improve environmental management. These areas will be the focal point of much of ADB’s economic and sector work and related advisory technical assistance.

54. While the details of the preparation of TFYP is underway and the details will be announced in March 2001, the Government approved its strategic direction in October 2000. The main strategic thrusts include: (i) maintaining high growth in next five years; (ii) increasing farmer’s income; (iii) developing the Western Region; (iv) supporting private sector/service sector development and SOE reforms; (v) preparing WTO entry; (vi) establishing social security system; and (vii) pursuing political reform. A new COS will be prepared in 2001 to ensure that ADB’s assistance strategy is supportive of the development strategy of TFYP. The work on the new COS will be initiated in 2000 and completed in 2001. As part of the preparatory work for the COS, a conference on PRC’s Long-term Economic Prospects and Challenges was held in ADB Headquarters in June 2000. Senior Government officials and other experts from PRC made presentations on several key issues relating to PRC’s socioeconomic development over the next decade (e.g. long term growth prospects, poverty, fiscal reform, social security reform).

55. The findings and recommendations of the ongoing study on the Policy Support for PRC 2020 Project will be used as inputs for the new COS. A rural poverty analysis has been completed under TA 3150-PRC: Study on Ways to Support Rural Poverty Reduction Projects. An Urban Poverty Study will be completed by early 2001. In line with the general endorsement on the ADB’s initial thoughts presented to the May 2000 Poverty Conference (see para. 24), discussions will begin on a Poverty Partnership Agreement by the end of 2000. These discussions will draw on several ongoing studies.¹¹

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