20000411--WB Active in Development of Western China

BEIJING (CEIS) -- The World Bank is ready to use its

expertise to help China develop the backward western parts

of the country, the director of the international

organization's China Program, Yukon Huang, said.

The official said that China should use World Bank

loans for the high-priority development needs of the west,

including educational, social and health programs.

He also suggested that China should take a broader view

of infrastructure development in the west and concentrate

budget resources on building village and secondary roads.

He made the remarks on April 10 at the International

Workshop on Fiscal Policy and Regional Development

sponsored by China's Ministry of Finance.

Noting that market access, labor quality and

infrastructure are crucial for attracting commercial

investment to western China, the World Bank official said

that the central budget, instead of commercial banks,

should play a key role in improving the conditions.

The central government should resume the responsibility

of repaying international loans for funding social and

educational projects in western China because local

authorities in the poor areas cannot afford to repay the

debt, he said.

The official, who has held various positions in the

World Bank over 24 years, noted that many other developing

countries have experienced the same problems China has in

expanding backward areas.

Still smarting from the Asian financial crisis, the

Republic of Korea, Malaysia and Thailand are cautious

about borrowing from outside sources. But they are willing

to use World Bank loans to fund social and educational

projects so as to improve the competitiveness of the

economy.

He said that due to the lower income and scattered

location of the population in western China, construction

of major national highways will not be economically viable

because there won't be enough traffic.

World Bank loans should be channeled to building rural

and secondary roads in order to link the west with the

national transport network and the broader markets in

other parts of China.

He also noted that China should pay attention to links

with neighboring countries in central and southeast Asia.

The growth of these economies is likely to turn western

China into an important channel of exchange between

central and eastern China and the neighboring countries.

Over the past two decades, the World Bank has loaned

about 35 billion U.S. dollars to China in support of over

220 projects. About 50 of the projects, worth more than

five billion U.S. dollars, were oriented to western China.

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