BEIJING, PEOPLE’S REPUBLIC OF CHINA (3 December 2019) — Asian Development Bank (ADB) President Mr. Takehiko Nakao met the People’s Republic of China (PRC) Vice Premier Mr. Han Zheng today to reaffirm ADB’s support for the country’s development priorities. Mr. Nakao also met with the Minister of Finance and ADB Governor Mr. Liu Kun.
Mr. Nakao congratulated Mr. Han on the PRC’s achievements in poverty reduction and rapid economic development over the past 40 years since the start of the reform and opening up, which made a substantial contribution to global growth and poverty reduction.
He appreciated the deep partnership between ADB and the PRC since the country became a member of ADB in 1986. By the end of 2018, ADB had committed $39 billion comprising $35 billion for the public sector and $4 billion for the private sector. “Through ADB’s lending operations, both ADB and the PRC have gained knowledge and ideas, which can be shared with other developing member economies,” said Mr. Nakao.
Mr. Nakao commended the country’s efforts to transition to a high-quality development model that emphasizes environmental sustainability, social inclusion, and innovation, which ADB will continue to support through its lending operations and knowledge work.
ADB forecasts gross domestic product growth of 6.2% in the PRC in 2019 and 6.0% in 2020. “Growth in the PRC is still solid, supported by strong consumption and the expansion of the services sector. It is natural to see somewhat slower growth as the country has been moving up in its per capita income. It is encouraging that the government is pursuing a more balanced, inclusive, and consumption-based growth,” said Mr. Nakao.
To address the issue of increasing inequality, the country can continue to reform the tax system to support income redistribution, including the introduction of inheritance tax and local level property tax. Taxation by local governments can be strengthened to generate sufficient revenue to deliver social services. Further progress on the reform of the hukou system is important to enhance workers’ mobility between urban and rural areas and ensure equal access to social services.
In his discussions with Mr. Liu, Mr. Nakao said ADB remains engaged with the PRC through both sovereign and nonsovereign operations, in such areas as environment and climate change, regional and global public goods, and mobilization of private sector resources. ADB will also help strengthen institutions for inclusive development including rural development, technical education and vocational training, elderly care, and integrated quality health services and expanded social assistance.
These are expected to be key areas of ADB’s operations under the new PRC Country Partnership Strategy (CPS) for 2021–2025 currently being prepared. The new CPS will be aligned with the PRC’s 14th Five-Year Plan, to which preparation ADB has contributed, and ADB’s operational priorities under its Strategy 2030.
During the meeting with Minister Liu, Mr. Nakao appreciated the PRC’s contribution to the Asian Development Fund (ADF), which provides grant support to poorer countries, and asked for the PRC’s greater contribution for ADF 13 replenishment (covering 2021–2024).
This year, ADB is planning to commit $1.8 billion in sovereign loans and $350 million in private sector operations to the PRC, focusing on environmental protection, waste to energy, health and elderly care, and agribusiness. ADB has continued its long-standing support to three government flagship cross-sector initiatives—the Yangtze River Economic Belt Initiative, the Beijing–Tianjin–Hebei Air Quality Improvement Program, and the Rural Vitalization Program. In doing so, ADB has combined different lending modalities of project loans, policy-based and results-based loans, and financial intermediation lending.
During this mission to the PRC, President Nakao visited Shaanxi province and met with the Governor, Mr. Liu Guozhong, to discuss potential areas of ADB’s support to the province. Mr. Nakao also visited the ADB-financed Accelerated Energy Efficiency and Environment Improvement Financing Project in Xi’an.
Tomorrow, Mr. Nakao will meet the Dean of the National School of Development at Peking University Mr. Yao Yang and attend a roundtable discussion with high-level academics to discuss the PRC’s road to development.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.