 Poverty Reduction: While the entire Bank program has poverty reduction as an implicit goal, a number of activities support direct poverty reduction initiatives, with an emphasis on rural development. The World Bank-sponsored Shanghai Conference on Scaling Up Poverty Reduction (May 2004) brought together more than 1,000 people, most from developing countries, to share experiences and practices in poverty reduction efforts. The conference, which included analysis of more than 100 case studies from around the globe, highlighted China's success in large-scale poverty reduction as well as the need for flexible approaches that engage the poor in finding solutions to poverty. Following the conference, the Bank, through WBI, has agreed to support the establishment of an International Poverty Research Center in China. While World Bank financing for poverty reduction is modest by Chinese standards, the Bank continues working closely with the Government to identify and pilot innovative poverty reduction efforts. The Bank is also working with the government on a national poverty assessment. Besides raising incomes, improving food security, and expanding access to basic services World Bank supported poverty reduction projects have been playing an important role in developing an effective multi-sector approach to poverty reduction. Lessons learned from these projects are now being replicated in poverty reduction programs across the country. In recognition of its poverty-reduction activities in China, in October 2004 the Bank became the first recipient of a Government of China award made to an international agency working to reduce poverty.  Rural development: The approximately 600 million Chinese still dependent on farming for their livelihoods face stagnating incomes and a deteriorating natural resource base. Bank rural development assistance focuses on the key challenges summarized in the Government's "three rural issues": promoting rural development other than agriculture; increasing farmers incomes; and industrializing/commercializing agricultural production. The Bank's rural portfolio in China has expanded from a core of integrated rural development and poverty reduction projects to newer projects supporting market development, promoting technology transfer, and integrating natural resource management. Many projects, including the Loess Plateau projects and Tarim Basin project illustrates the benefits of improved resource management. By addressing issues such as land tenure and grazing, transforming unsustainable agricultural practices, and implementing long-term conservation practices, local farmers and herders are learning new skills and improving their families' well-being.
Back to top  Urban Development:
Bank lending and analytic assistance has increasingly focused on China's development of productive, livable, and well-managed cities. Improved environmental infrastructure, urban management and financial sustainability are key features of this support. The Shanghai Urban Environment Projects - which the Bank supports through the first and second Adaptable Program Loans - are innovative programs that focus on metropolitan environmental management and infrastructure finance reforms. Other recent innovative projects include the Guangdong Pearl River Delta Project which is helping Guangzhou city improve its waste water and hazardous waste management facilities. It is the first in a possible series of projects in the PRD region that will lead to a reduction in water pollution and an improvement in overall environmental and economic conditions. The Bank has also recently approved urban environment operations for Hunan province, the Lake Tai region, and Ningbo municipality. Beyond these projects, the Bank is focusing increasing attention on assisting the cities and towns in the lagging region of western China to improve their urban infrastructure and environment. These projects include the Chongqing small cities infrastructure improvement project which is helping to enhance water supply, flood protection and secondary roads in fast urbanizing areas outside of the core city, and the Sichuan urban development project which is removing infrastructure bottlenecks in four second-tier cities in the province while strengthening urban planning and land management practices. More  Environment: In line with the Bank's strategic focus in China on facilitating environmentally sustainable development, the Bank has supported multiple initiatives with explicit or implicit environmental goals through a combination of loans, grants, and analytical and advisory assistance. Almost all of the Bank's assistance in energy, water, and rural development has environmental elements, including urban pollution control and sewerage, watershed rehabilitation, water conservation, afforestation, and nature conservation. The first phase of an ambitious effort to deal with environmental degradation in the Pearl River Delta is underway as part of a more coordinated strategy to improve the interlinked fortunes of Guangzhou and Hong Kong, with subsequent phases under preparation. The Bank has also assisted China in obtaining significant grant funds through the Global Environment Facility (GEF). Since GEF was launched in 1991, the Bank has approved fifteen GEF co-financed projects in China, involving $280 million in GEF grant resources. The Bank group has also supported China in meeting it obligations under the Montreal Protocol to phase out ozone depleting substances through grants totaling $445 million. Finally, the Bank has been providing AAA and capacity building support in environment-poverty linkages, climate change, valuation of environmental health risks, and water pollution control.
Back to top  Transportation: The transport sector plays a critical role in development by promoting growth of a market economy and giving the poor improved access to both local and distant markets and services. In China, the Bank has supported development of the National Trunk Highway System as one way to help support economically lagging regions with major markets on the coast. The recently approved Inner Mongolia Transport and Trade Corridor Project will promote and sustain the development of China's cross-border trade between China on one hand and Russia and Mongolia on the other by improving transport infrastructure and logistics. These improvements, in turn, will lower transport costs, increase income from external trade, and raise incomes in Inner Mongolia, the country's third-largest province and one of the poorest provinces of the western region. Bank loans for the Second National Railways Project and the Hubei Shiman Highway Project address the infrastructure challenges of connecting eastern provinces to central and western China through the improvement of the Zhe-Gan line and the construction of the Hubei Shiman Expressway .
 Education: The Bank has supported some 20 education projects in China since 1981, with a shift in strategic emphasis from urban-based higher education projects in the early years to a more recent emphasis on rural poverty based basic education projects. Higher education Reform Project successfully completed in 2005 and contributed greatly to the quality improvement of science and engineer education in China. Ongoing the Basic Education in Western Areas Project, in cooperation with DFID, is implemented in Sichuan, Yunnan, Guanxi, Ningxia, and Gansu provinces which aim at improving access and quality of compulsory education in western areas. Ongoing technical assistance and analytical work include supporting research and policy making on education provision for migrant children, and evaluating government new policy on financing rural compulsory education. A lending project focusing on institutional change and innovation in the area of vocational education and training is currently in the Bank's lending pipeline. .
Back to top  Health: The Bank has primarily been helping China to deliver quality health services to the poor and to reform its approach to health care financing, since the first health lending project in 1984, the Bank in 20 years has supported over 15 health projects in China with a focus on two strategic priorities i.e. rural health and disease prevention. Through these projects, the Bank and the Chinese government have been working closely to address a wide range of issues in the areas including: basic rural health service, medical education, regional health planning and development, rural health manpower, preventive medicine, Maternal & child health, TB control, HIV/AIDS, SARS and other infectious disease response program. Among them, the ongoing Tuberculosis Control Project is the first in the Bank to apply the 'blending mechanism' for project financing. The project blends a $37 million DFID grant with a $104 million Bank loan and provides access to effective TB control services to nearly 700 million people in 16 Chinese provinces. Without these services, many families, especially the poorest ones, will not seek or receive effective treatment. China has 400 million people infected by TB, including five million with active disease. Each year 1.3 million people get active TB and 150,000 die. Since 1990, the Bank has helped China to expand effective TB control with remarkable results, with high coverage rates and a 35% reduction in prevalence in project area compared to 3% in the non-project areas. This project expects to detect at least 70% of new infectious (smear positive) cases and cure at least 85% in the project areas with free diagnosis for all and free treatment of at least the infectious cases. The project follows the well-recognized DOTS system of TB services along with more comprehensive social assessments and health promotion measures designed especially to reach the poorest and disadvantaged groups of families. The blending of DFID and World Bank resources helps to enable more affordable funding for this and other social sector programs aimed at helping poorer sections of society and, at the same time, simpler management responsibilities to the beneficiaries. In addition to large volume of lending project, the Bank has also been actively engaged in the policy dialogue and health system reform in China through analytical and advisory activities (AAA). A recent example of such activities is the ongoing health sector analysis with a focus on rural health in China. The report generated is currently under consultation with the Chinese government.
 Social Protection: The Bank has been assisting China to develop and implement social protection reforms through a range of analytical advisory activities (AAA) and lending operations that support pilot experiments. Ongoing AAA work encompasses the areas of labor market development, social insurance and social safety net. In the area of labor market, the Bank supported a technical cooperation program and a report is being produced that offers an overview of China's labor market development. Following on from this work, an analytical program on rural to urban migration is being launched to analyze labor market situations of the migrants and social policies that affect migration outcomes. In the area of pensions, the Bank has had a long engagement in policy analysis and evaluation, with a primary focus on urban public pension system. New work is being initiated to assess pension policies and options for rural China. In recent years, the Bank started to engage in the area of social assistance, analyzing the experience of urban and rural Dibaosystems. Besides analytical tasks, several technical assistance programs supported by trust funds or TA loans are also ongoing, focusing on capacity building in actuarial analysis, pension fund supervision, work injury prevention, recovery and insurance, employment of women, protection of the vulerable, etc. While small in volume, the lending program aims at supporting innovations and experiments with new concepts and reform measures. A lending project focusing on skills development and employment support for migrants is currently in the Bank's lending pipeline.
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 Water Issues: Water issues are a high priority for the Government, particularly given implications on food security and rural income. China faces serious water problems including regional water scarcities, flooding, and water pollution. A government-World Bank team collaborated on preparing a Water Resources Assistance Strategy for China, supplemented by an AusAid collaborated Agenda for a Water Sector Strategy for North China to assist in addressing critical water resource constraints limiting development. Reflecting increasing Government emphasis on better water resources management, including demand management, the Bank has complemented investment in water-related infrastructure with increasing attention to water policy, planning, management, and conservation issues. The Tarim Basin II Project helped establish, through legislation by the Xinjiang People's Congress, the Tarim Basin Water Resources Commission which performs water management at both Basin and farmer-household levels and makes more water available to downstream of the Tarim River, contributing to the ecological environment including poplar trees and wild birds and animals. This is the first fully functional integrated river basin management system in China and is recognized at the national level as a successful example. The Hai Basin Integrated Water and Environment Management Project, funded by a US$17.0 million GEF grant, is another good example. The surface and groundwater in the Hai Basin are major sources of irrigation and drinking water for tens of millions of people who live in its basin. One of the world's most ecologically important waters, the Bohai Sea receives heavy land-based pollution largely coming from domestic, industrial, agricultural, and livestock sources from the Hai basin. In addition to water pollution, the basin's groundwater resources are in some cases polluted and being rapidly depleted. By supporting vertical (central, basin, provincial, county, water user) and horizontal (water department, environmental protection department) integration and introducing remote sensing techniques to monitor and control water consumption, the project aims to improve integrated water and environment planning and management and pollution control in the Hai Basin, promote institutionally-coordinated and effective local and basin-wide water and environment planning and management, enhance local capacity in water and environment Knowledge Management (KM) and implementation, and reduce groundwater overdraft in the Hai Basin and wastewater discharges from small cities along the rim of the Bohai Sea.
 Energy. In keeping with China's changing needs, the emphasis of Bank's support has shifted from financing large energy projects to focusing on assisting in managing the resource scarcity and environmental chanllenges of the energy sector. The Bank's energy sector strategy and objectives in China are: (i) support the government efforts to aggressively implement energy efficiency policies and measures; (ii) assist the government to harness indigenous clean energy, particularly renewable energy; and (iii) mitigate the environmental impact of energy production and consumption, particuarly coal. The Bank's instruments to partnership with the government include: (i) sector work and technical assistance on key sector strategy and policy; (ii) selected lending to renewable energy development, energy efficiency and enviromental impact migitation such as SO2 removal at power plants and coal bed methane recovery at coal mines; (iii) Global Environment Facility's support to capacity building, technology improvement, legal and regulatory system building; and (iv) carbon financing to promote transactions under the CDM.
Back to top Financial Reform: In response to requests for advisory support, the Bank is providing technical assistance on key financial sector issues including access to finance (micro and small enterprise finance, rural finance, housing finance), overall financial sector reform and stability (financial sector development including improved monitoring of systemic risks), state-owned commercial bank restructuring, and capital market development. The Bank is supporting efforts to deepen capital markets to widen sources of infrastructure financing and working with a major policy bank to pilot commercially sustainable, non-subsidized micro- and small enterprise finance.  Enterprise Reform and Private Sector Development: The World Bank and the International Finance Corporation (IFC, the Bank Group's private-sector arm) are involved in China's corporate sector reform and development agenda. The World Bank provides policy advice and technical assistance covering areas such as corporate governance, investment climate, management of state assets, and enterprise-led innovation. In addition, through a series of analytical works and technical assistance, the World Bank is also playing an active role in supporting the development of service sector in China with a primary focus on public service reform in both urban and rural China. IFC is supporting SOE reform through investments for selected SOE privatizations. It is also supporting private sector development through investments to support the growth of emerging domestic private companies and technical assistance to improve the enabling environment. The IFC-managed China Project Development Facility (CPDF) is supporting SME development and access to finance in Sichuan province.
 For more comprehensive information about these sectors and China, please access Development Topics.
Updated on September, 2006 
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