Staying Relevant in a Changing Global Economy

The World Bank is working with Beijing to implement a “sunshine school project” that installs 100 megawatts of rooftop solar PV systems in 800 primary and middle schools.

This year marks the 35th anniversary of the inauguration of cooperation between China and the World Bank. From July 15 to 17, 2015, World Bank Group President Jim Yong Kim paid a visit to China. During this three-day visit, he met with Premier Li Keqiang and other senior leaders, including Finance Minister Lou Jiwei and Governor Zhou Xiaochuan of the People’s Bank of China. President Kim held far-reaching discussions with Premier Li Keqiang on the global economy, development finance, and China’s health reforms. President Kim and Finance Minister Lou signed an agreement establishing a US $50 million fund to aid poverty reduction. The World Bank President also met with leaders of the Multilateral Interim Secretariat for Establishing the Asia Infrastructure Investment Bank (AIIB) to discuss closer collaboration. These initiatives solidify the growing partnership with China, which is already the Bank’s third-largest shareholder and an important contributor to the International Development Association (IDA), the institution’s fund for the neediest, as well as the Global Infrastructure Facility.

To learn more about previous and potential cooperation between China and the World Bank, China Today interviewed Mr. Bert Hofman, the World Bank’s new Country Director for China, Mongolia and Korea in the East Asia and Pacific Region, based in Beijing. Mr. Hofman has more than 22 years of experience in the World Bank, and 16 in other spots in the East Asia region. Among his other former posts, Mr. Hofman has served as chief economist for China, as well as for Indonesia, and national economist for Mongolia and Namibia, respectively.

China Today: Some 35 years ago, the Chinese government’s launch of the historical initiative of reform and opening coincided with China and the World Bank together turning over a new leaf by building an equitable and cooperative partnership. As the head of the Beijing Office of the World Bank, could you please offer us a brief evaluation of this 35-year cooperation?

Mr. Bert Hofman: I believe the China-World Bank partnership has been among the most effective partnerships that my organization has ever joined in with a member state. This partnership has enabled us to engage with the tremendous success in development which is China’s economic transformation since the late 1970s. I think the key to this success was our support of China’s pragmatic, learn-by-doing approach to economic reform, even as we provided technical assistance in numerous fields, often through Bank-supported projects. A second element of this success has been its continuous evolution hand-in-hand with China’s progress. As China gained ever more expertise, confidence and access to international capital markets, we saw our financial role shrink, and China now uses the Bank mainly for innovations for development and to address new, emergent issues.

China Today: China is the world’s largest developing country, while the World Bank is the largest multilateral development and assistance organization. The World Bank’s motto is, famously, “Working for a World Free of Poverty.” What is the great significance of this successful 35-year cooperation in this regard?

Mr. Bert Hofman: Perhaps the greatest significance is China’s contribution to worldwide poverty alleviation. First, China itself has achieved 35 years of record growth and development through opening-up and reforms that have lifted 600 million people out of poverty. I am proud that the partnership was instrumental in achieving this. Second, as China’s importance in the world has increased, and its economy has opened up and become more market-based, the influence that China exerts on other countries has increased as well, through trade, finance and dissemination of ideas. This has been a positive force for other developing countries and the world economy – China has been contributing about one third of world growth in recent years, and its demand for commodities has boosted economies around the globe. Third, we at the World Bank are learning from the way China manages its development challenges, and using that knowledge to enhance the development performance of other countries.