A set of interrelated interventions seeks to pave the way for the benefits of economic growth to reach the rural poor in the People's Republic of China. These investments, supported by the Sanitation Financing Partnership Trust Fund under the Water Financing Partnership Facility, is geared toward environmental management and agriculture support programs that will assist subsistence farmers and other members of rural communities.

People’s Republic of China – Global poverty is prevalent in rural areas, which makes rural development a critical pillar in the overall economic and social growth of developing Asia.

The People’s Republic of China (PRC) has made spectacular progress in reducing rural poverty when economic reform started at the turn of the millennium. This remarkable feat, however, still sees some 370 million people living below the international poverty line.

The PRC ramped up its rural development efforts with the establishment of the National Strategic Plan for Rural Revitalization (2018–2022). This plan aims to reduce rural poverty, modernize the rural economy, enhance the rural environment, and promote green and inclusive growth.

The plan is also aligned with the government’s Yangtze River Economic Belt (YREB) Development Plan (2016–2030) and the YREB strategic framework of the Asian Development Bank (ADB).

To get this plan into action, ADB signed a memorandum of understanding with the National Development and Reform Commission, and the Ministry of Finance in 2018. The collaboration was designed to assist in the areas of solid waste and wastewater management by addressing non-point source pollution and promoting reuse of agricultural waste, and in agriculture, particularly by improving practices to raise productivity.

Ensuring a strategic approach

ADB approved the $2.7 million Preparing Environmental and Rural Development Projects transaction technical assistance (TA) facility in 2019 to provide project preparation support to five ensuing investment projects in rural development.

The Sanitation Financing Partnership Trust Fund under the Water Financing Partnership Facility is cofinancing the TA with $450,000. The Bill & Melinda Gates Foundation is a financing partner of the trust fund.

The facility’s project preparation support ensures a consistent and strategic approach, especially across local capacity improvement, enhancing project implementation readiness, and strengthening coordination for sustainable rural development and environmental protection in the YREB and surrounding areas. In addition, the TA facility helps to explore innovative financing models that will address the limited funding for rural vitalization investments.

Curbing pollution, improving sanitation, and restoring rivers

The Water Financing Partnership Facility is helping to deliver the needed investments in rural development through the following project preparation support:

  • Fujian Mulan River Basin Integrated Ecological Restoration and Management Project, $150,000 Proposed as a 2021 standby loan of $200 million, the project aims to develop an integrated solution for flood control, ecological restoration, and water quality improvement in the Mulan River. The project seeks to revitalize Xianyou County in Putian City and strengthen the environmental management capacity of local government officials and staff. Examples of capacities that the project will improve are developing and operationalizing a river chief smart water system for monitoring and evaluation; and decision-making support for the upper and middle reaches of the river basin. In conjunction with this planned restoration, a method to capture land value increase in the area is being explored, as well as other potential revenue sources that can help fund more rural investments.
  • Hunan Xiangxi Rural Environmental Improvement and Green Development Project, $150,000 The proposed $200 million Hunan project (for 2021 approval) will seek to enhance the living environment and industrial productivity in Xiangxi Prefecture. This will include improving rural waste and sanitation management, developing local special agricultural products, and integrating the urban and rural industries in Xiangxi Tujia and Miao Autonomous Prefecture, one of the poorest regions in the country.
  • Jiangxi Ganzhou Rural Vitalization and Comprehensive Environmental Improvement Project, $150,000 The proposed $200 million Jiangxi project will focus on developing Ganzhou municipality, a poor rural area with weak environmental management institutional capacity. In particular, the nearby Gan River has severely degraded through the years. The river’s water quality is suffering due to pollution from improper waste and sewage disposal. The project will seek to build governance capacity for environmental management, pilot green development mechanisms, improve rural waste and sanitation management, and promote better water and soil conservation practices.

Interconnected change

The three proposed ADB investments are expected to not only tackle environmental challenges, such as rampant pollution and sewage disposal, but to also highlight the important link between environmental protection and economic development. By managing water resources, sanitation, and ensuring proper agricultural practices, rural communities can improve their livelihood, increase their income, and more importantly, have better quality of life.

Overall, the investments will contribute to the government's goal of fostering sustainable, resilient, and inclusive growth for rural development.