China-World Bank Partnership: A Success Story
World Bank-China partnership has grown in strength and scope since China became
member of the World Bank Group in 1981. It is now a partnership of global
significance. China is the World Bank's largest and one of the best borrowers.
With nearly $28 billion committed to China through 184 loans and credits over
the 1981-1997 period, the World Bank has become China's largest multilateral
lender, although the World Bank's 1996 commitments to China as a share of
Chinese external capital inflows that year were only 8 percent of the total. The
agricultural sector has been the largest recipient of those commitments
(slightly over 25 percent of the total), substantially higher than the sector's
share in the overall World Bank lending, which now stands about 15 percent.
The importance of agricultural lending to China is explained by two factors.
With one fifth of the world's population and one of the fastest growing
economies in the world, China has the potential to significantly affect the
global food and fiber situation. That will depend on China's future demand
growth, the capacity to meet that demand domestically and the extent to which
China will enter global markets. Another factor is China's project performance.
According to the World Bank's Operations Evaluation Department, which routinely
audits all World Bank financed projects, the Chinese projects show a the highest
success rate regardless of how effectiveness of the World Bank lending is
assessed. It has highest rating in the extent to which loan conditions are met,
the speed of project implementation, project impact as reflected in return on
investments effect on poverty reduction or prospects for sustainability.
Agricultural sectors typically faired less well than some other sectors in the
World Bank's overall lending, but once again China's success stands out. (World
Bank, 1997b, 1995, 1994 OED Reports)
What explains this outstanding performance, what role has the World Bank played
in Chinese agricultural development and trade, how can it be expected to
contribute in the future, and what lessons does the World Bank-China partnership
offer to other countries?
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