Annual Report 2008

East Asia
People's Republic of China, Mongolia

Regional cooperation is a core element of the People's Republic of China's country partnership strategy with ADB and will also be prominent in Mongolia's new strategy. A high priority for ADB will be building crossborder infrastructure in both countries for better connectivity with Central Asia Regional Economic Cooperation members and the Greater Mekong Subregion.

Overview

ADB's operations in East Asia were fully aligned with Strategy 2020's core priorities and focused on achieving environmentally sustainable inclusive growth. Private sector development remained a strategic priority in both the People's Republic of China (PRC) and Mongolia. Further, ADB endeavored to promote nonsovereign lending and private-public partnerships in infrastructure. In both countries' finance sectors, ADB focused on providing technical assistance to increase access to financial services, improve financial infrastructure, and faci litate trade among neighboring countries.

East Asia sovereign lending operations (Table 18) comprised 13 loans to the PRC for $1.5 billion, and five Asian Development Fund (ADF) grants to Mongolia for $74.3 million. In addition, Mongolia also received $8.0 million from Japan Fund for Poverty Reduction for four projects covering local roads, ener gy conservation, water supply for the poor, and community-based natural resource management. ADB provided $28.1 million in technical assistance consisting of $19.5 million for the PRC, $5.5 million for Mongolia, and $3.2 million for regional technical assistance. ADB's nonsovereign approvals in the region totaled $424.1 million plus an estimated portion of $45.0 million from the Equity Investment in Asian Clean Energy Private Equity Funds, a regional project (Statistical Annex 10). The $424.1 million includes a $200 million B-loan provided by commercial lenders with ADB acting as lender of record.

Portfolio Management

ADB has been making sustained efforts to promote results-based portfolio management, monitoring, and evaluation in East Asia. Notable initiatives in the PRC included assistance to the National Development and Reform Commission to establish a results-based project monitoring and evaluation system, and modern project management training programs for government project staff. The sixpoint portfolio management action plan was further refined to focus on improving project readiness for better quality at entry, and streamlining government and ADB procedures. ADB also strengthened the resident missions to assume increased portfolio management responsibilities. Consequently, as of 31 December 2008, only one project (1.5% of all projects under implementation) was considered at risk (Table 17). Operational targets for project administration were fully met.

Regional Cooperation

As a key policy dialogue theme, regional cooperation was incorporated into the PRC's country partnership strategy and will be prominent in Mongolia's new strategy. ADB accorded high priority to building cross-border infrastructure in both countries for better connectivity with Central Asia Regional Economic Cooperation (CAREC) members and the Greater Mekong Subregion. To ease trade, ADB played a critical role in developing the Joint Transport and Trade Facilitation Action Plan and the Work Program for Integrated Trade Facilitation and Customs Cooperation. The CAREC Ministerial Conference recently endorsed both and prioritized a list of short- to medium-term activities to support them. ADB also contributed to the CAREC region's considerable progress in simplification and har monization of customs procedures and documentation, customs modernization and the use of information technology, risk management and post-entry audit, data exchange and joint customs control, and regional transit development.

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To promote cleaner energy, ADB continued to implement the Coal Mine Methane Development Project with a loan of $117.4 million