New Country Partnership Framework for China Reduces Lending and Focuses on Global Public Goods and Institutional Challenges

The Board of Executive Directors of the World Bank Group (WBG) today discussed the Country Partnership Framework (CPF) for China for FY2020 to 2025 and expressed broad support for the WBG’s engagement in China’s structural and environmental reforms.

The China CPF reflects the evolution of the WBG’s relationship with China toward a decline in lending and a more selective engagement in line with the capital increase commitments agreed to by shareholders in 2018. The CPF aims to help China address its development challenges, notably the transition to more environmentally sustainable growth, the strengthening of key Chinese institutions engaged in economic and social development, and the reduction of inequality in lagging regions.

China has achieved substantial development success since it started structural reform and opening up policies in 1978. China’s GDP and income growth accelerated dramatically as it developed, and over 850 million people were lifted out of poverty. The Chinese authorities recognize the important contribution of the World Bank in catalyzing growth-oriented reforms.

However, with China’s growth moderating in the face of structural constraints, key challenges going forward will be allowing the market to play a more decisive role in allocating resources and addressing the social and environmental legacies of China’s development path.

World Bank (IBRD) lending will decline over the CPF period. As it does, the WBG stands ready to provide more reimbursable advisory services (RAS), technical assistance, and policy advice; and engagement by the International Finance Corporation (IFC) in China’s private sector, especially in investments in global public goods. At the CPF midpoint, the WBG will assess progress in CPF implementation, including the key elements of the graduation policy.

“The CPF reflects the evolution of our relationship with China,” said Martin Raiser, World Bank Country Director for China. “Our engagement will be increasingly selective. Future World Bank lending will primarily focus on China’s remaining gaps in policies and institutions for sustainable graduation.”

The CPF will focus on three areas of engagement:
•Advancing market and fiscal reforms by improving the environment for competition and private sector development; and achieving more efficient and sustainable subnational fiscal management and infrastructure financing.
•Promoting greener growth by reducing air, soil, water, and marine plastic pollution; strengthening sustainable natural resource management; promoting low-carbon transport and cities; and facilitating the transition to a lower carbon energy path.
•Sharing the benefits of growth by increasing access to health and social services; and improving the quality of early childhood development.

IFC will apply a rigorous additionality assessment to its program. IFC will continue to concentrate on promoting best practice international standards and on developing the private sector.

Outside China, the WBG will aim to help share applicable lessons and knowledge from China’s poverty reduction, increase the transparency of China’s lending and investment activities, and emphasize the importance of high standards of social and environmental risk management in order to reach sustainable development outcomes.


PRESS RELEASE NO: 2020/087/EAP

Contacts


In Washington
Nick Keyes
(202) 473-9135
nkeyes@worldbank.org


In Beijing
Li Li
(86-10) 5861-7850
Lli2@worldbank.org