Country can help itself: World Bank

PUBLISHED : Wednesday, 26 May, 2004, 12:00am
UPDATED : Wednesday, 26 May, 2004, 12:00am

World Bank president James Wolfensohn yesterday defended its reduced lending to the mainland, saying the country was now rich enough to fund many projects on its own.

From 1981 to mid-2003, World Bank lending to China totalled US$36.6 billion for 245 projects, according to the bank's website. This year, the bank will lend China $3 billion for 20 projects.

'The bank has a smaller lending programme to China since you have so much money. You have very significant reserves, and frankly you don't need to borrow money for a lot of the projects that you can finance yourselves,' said Mr Wolfensohn on the eve of a conference on poverty reduction.

The mainland's foreign-exchange reserves reached nearly US$440 billion at the end of March, the second-highest in the world after Japan's.

Some lenders, notably Japan, have reduced government aid to China. Although it remains a main donor, Tokyo cut loans to the mainland by 20 per cent to 96.7 billion yen (HK$6.7 billion) in the past financial year. Other countries are also reviewing their lending policies given the mainland's growing economic power and spending on projects like its own space programme.

Mr Wolfensohn said Beijing could play a new role by lending to others.

'In more and more places, your government is prepared to provide assistance to other developing countries, and so I think that is a trend that is likely to continue. It's not just us working to help China but also working with China to help other parts of the world.'

The World Bank chief also praised China's efforts at improving living standards.