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WB's Lending to China Focuses on Innovation

Four new projects approved on Tuesday by the World Bank has brought the organization's support for innovative development projects in China in the 2008 fiscal year (June 30, 2007 – June 30, 2008) to a total of US$1.513 million.

"These four projects are excellent examples of how the World Bank can help China with its environmental and social challenges," said David Dollar, World Bank Country Director for China. "They all pilot new approaches or new technologies that, if successful, can be scaled up and make a large contribution to the quality of life and sustainability of development."

The new Rural Health Project (US$50 million) seeks to support and extend the rural health reforms carried out by the government of China by testing a series of new innovations in financing, delivery of services and basic public health. For example, the government has been experimenting with health insurance schemes such as the New Cooperative Medical Scheme (NCMS) and Medical Assistance (MA). The Bank-supported project will extend and test various policy options and innovations in key areas of these financing reforms in selected provinces and counties.

Lessons learned will help the government develop new approaches that can be applied in the establishment of the new rural health financing system in the country. Similarly, the project will support pilots to improve quality of services, and strengthen public health initiatives such as immunization programs and improved disease surveillance programs.

With the number of rural-urban migrants in China estimated to be about 150 million, the new Rural Migrant Skills Development and Employment Project (US$50 million) will support China to deal with the human skills challenge this massive population shift presents. The Bank will work with Ningxia, Shandong and Anhui provinces, and the ministry of human resources and social security to improve skills development programs for migrants.

Among other things, it will strengthen links between employers and training institutions and help tailor employment services to the needs of rural migrants so they are better informed about employment opportunities in urban areas. It will also support innovative ways to increase migrants' awareness of their rights, and to have access to legal services when needed.

The city of Xi'an, home to the world-renowned Terracotta Army and other cultural relics, faces a huge challenge of balancing preservation of its cultural heritage with the demands of a modern city. Through the new Xi’an Sustainable Urban Transport Project (US$150 million), bus prioritization, bicycle routs, traffic calming and speed-reducing strategies will be introduced in an effort to foster better road use and access to cultural sites.

The ShiZheng Railway Project (US$300 million) will help construct a new 355 km dedicated high-speed passenger rail line between Shijiazhuang in Hebei Province and Zhengzhou in Henan Province. This is part of the new 2,100 km Beijing-Guangzhou dedicated high-speed passenger line which, when completed in 2010, is expected to provide a major boost in rail transport capacity while also reducing the travel time for passengers from the present 24 hours to less than 10 hours. This is the first high-speed passenger railway supported by the World Bank since the new Tokaido line (Tokyo to Osaka) was completed in 1964, the first link of the Shinkansen bullet train in Japan.

China continues to be one of the largest borrowers of the World Bank during FY 2008. Most Bank projects approved this year aim to address environmental challenges through improvement of public transport systems, expansion of urban wastewater treatment and pollution control, and strengthened approaches to energy efficiency.

Over the years, China has made good use of Bank-supported projects to learn international experience and best practice, and to pilot new ideas and approaches for scaling up later on. A good example is the project to support the development of the photo-voltaic industry in China, which last week won the Ashden Award, the world's leading green energy prize.

In the aftermath of the earthquake the World Bank offered China a US$1.5 million grant to support technical assistance for recovery and reconstruction efforts. The Bank also mobilized a team of international experts, many experienced with post-disaster reconstruction, from around the world to share experience at a workshop with Chinese counterparts charged with reconstruction planning.

(China Development Gateway June 25, 2008)

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