Countries and Regions

	Table of Contents
p. 6 of 7 BACK | NEXT I. Current Development Trends and Issues II. Implementation of the Country Strategy and Program III. Portfolio Management Issues IV. Country Performance and Assistance Levels

Country Strategy and Program Update 2006-2008: People's Republic of China

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III. Portfolio Management Issues

A. Portfolio Performance

21. The PRC portfolio is ADB’s second largest and one of the best-performing. There was no project rated “at risk” in 2004, compared with 14.1% ADB-wide. The contract award ratio increased from 14.9% in 2003 to 19.1% in 2004, higher than the ADB-wide average of 17.4%. However, the disbursement ratio in 2004 was only 16.9%, lower than the ADB-wide average of 17.7%. This could be attributed to a record lending of nearly $1.5 billion in 2003, all of which became effective in 2004, resulting in a large amount available for disbursements in 2004. Compliance with submission of audited financial statements improved significantly in 2004, with 95% of the projects achieving full compliance and 5% complying late. Compliance with loan covenants for almost all projects was rated as highly satisfactory or satisfactory. Project start-up delays and some extension of loan closing dates continue to be problem areas in the portfolio.

B. Performance Monitoring and Evaluation

22. The 2004 portfolio performance and key portfolio issues were discussed in the midterm country portfolio review concluded on 1 April 2005. This resulted in an updated joint Government-ADB action plan to improve ADB’s PRC portfolio performance. Since the last review in June-July 2004, several of the jointly agreed actions have been implemented, including

1. training on project preparation procedures and guidelines and ADB’s guidelines on procurement and use of consultants
2. delegating additional projects to the Resident Mission for administration
3. increasing support to implementing agencies on environmental and social safeguard compliance
4. a review of the disbursement operations in the PRC loan portfolio and a review of the PRC water supply, sanitation, and waste management projects

Training programs for government counterparts will continue. ADB and the Government will continue to regularly monitor the status of implementation of the action plan and the overall portfolio performance.

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