Regions and Countries

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p. 7 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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IV. Country Performance and Assistance Levels

A. Proposed Lending Level

23. The CSPU has programmed total loan assistance of $4.5 billion for 2006–2008 (excluding subregional projects), amounting to annual average lending of about $1.5 billion. Of this, 47.6% is for transport projects, 20.0% for agriculture and natural resource projects, 14.8% for social infrastructure projects, 12.0% for energy sector projects, and 5.6% for multisectoral projects.²⁸ About 85% of these projects will be located in the central and western provinces. In view of the size of the PRC’s needs, its absorptive capacity, and its consistently satisfactory project implementation record, the level of lending assistance is appropriate for ADB to continue to play a relevant and effective role in working with the PRC to achieve equitable growth and attain the MDGs. Appendix 1, Table A1.10 contains the 2006–2008 lending program.

B. Nonlending Program

24. The annual nonlending program amounts to around $11 million annually for the period 2006–2008 (Appendix 1, Table A1.11). In view of the wide range of strategic issues and TA funding constraints, the focus of the nonlending program has been sharpened through greater selectivity and prioritization to meet the needs of the PRC. TA projects will focus on operational support and policy-related and knowledge-based products. Operational support will include transport, energy, land management, water supply and wastewater treatment, urban development, education and health, and environment. Policy-related and knowledge-based products will cover support for policy reform and deepening the impact of ADB lending projects, financial sector reform, law and development, fiscal reform, and support to education and health.

25. ADB has taken several initiatives to improve the efficiency of TA implementation and to enhance TA ownership by executing agencies (EAs). The first advisory TA award program, which identified five TAs for their outstanding performance, has received strong support from the EAs. An advisory TA project on policy reform support that aims to provide quick responses to policy changes that are high on the Government’s agenda has been well received by the Government. The TA is timely and relevant, and has produced valuable outputs for the clients. The Government has asked for it to become an annual project.

C. Summary of Changes to Lending and Nonlending Program

26. Compared with the CSP (2004–2006) lending program (61% of the lending volume for transport, 10% for agriculture and natural resources sector, 10% for energy, 15% for social infrastructure, and 4% for multisectoral projects), the 2006–2008 lending program is spread more evenly across sectors (para. 23 and Figure 1). The updated 2006 nonlending program remains at 26 TA projects, while the total budget has been reduced from $13 million in the last CSPU (2005–2007) to $11 million. Changes in the lending and nonlending program compared with the last CSPU are shown in Appendix 5, Tables A5.3 and A5.4. The Government has recently supported in principle using sector lending for projects with a large number of subprojects and where sector policies and investment plans are in place and the EAs are committed and capable.²⁹

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