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Regions and Countries Country Partnership Strategy Document
Country Strategy and Program Update 2003-2005: People's Republic of China
IV. Country Preformance and Assistance LevelsA. Lending Level Proposed30. Substantial financial resources are needed to help the PRC restructure its economy and implement a regional strategy to improve income levels and reduce poverty in the interior provinces. During 2003–2005, ADB lending to the PRC could increase to $1.5 billion annually (Appendix 1, Table A1.10) from the average annual lending of $1.0 billion during 1999–2001 and the proposed lending of $1.3 billion being processed in 2002. The proposed level is considered appropriate for a large country with sound macroeconomic fundamentals, strong absorptive capacity, and good project implementation. About 77% of the proposed lending will finance projects in the central and western regions, compared to about 49% during 1986–2002. The transport sector will continue to dominate future ADB operations, with social infrastructure increasing its share of total lending during 2003–2005. B. Nonlending Program
31. A planned annual core TA program of about $14 million will support and complement the proposed lending program of 2003–2005. More funding will be mobilized from other sources. Priority will still be given to PPTAs. The ADTA program will support policy reforms aimed at promoting sustainable development and equitable growth, private sector participation and the rule of law and help strengthen the capacity of public sector management to respond more effectively to the challenges and opportunities under PRC’s evolving new business environment and growing integration with the global economy. C. Summary of Changes to Lending and Nonlending Program32. The proposed annual lending level of $1.5 billion is higher than the $1.3 billion–$1.4 billion range proposed during the previous CSP update. Average loan size is expected to increase with the proposed $500-million loan for the Yichang–Wanzhou Railway Project in 2003, the single largest loan to be processed for the PRC. The DFID Fund will be used to enhance the poverty orientation of the proposed program. Environmental protection will emerge as an important theme with more projects in urban environment improvement, wastewater treatment, renewable energy, and land degradation through GEF OP12.
33. The nonlending program will also increase slightly to support a focused TA program with strong linkages to the various CSP-related studies on sound development management, private sector development, environment and poverty. Promotion of social development will be facilitated through new TA proposals for the education sector. In line with the PRC’s increased decentralization, TA proposals to forge strategic partnerships with provincial governments to address ADB thematic priorities have also been included. These will strengthen ADB’s role as a major provider of knowledge resources, as expected by the Government.
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