China's proposed five-year funding plan for its infrastructure and environmental reforms has just been approved by the World Bank. The country's Ministry of Finance confirmed the news on Tuesday, citing the importance of the fund to support the country's development plans from 2020 to 2025.
The funding plan will include a series of loans that will be granted to China through the International Bank for Reconstruction and Development. The multilateral lender will lend China $1 billion to $1.5 billion per year from starting next year. Meanwhile, the International Finance Corporation (IFC) will continue its financing of between $80 million to $1.2 billion per year during the same period.
The loan program, called the Country Partnership Framework, aims to use the World Bank's funds to address key development challenges. This will include the financially-intensive shift into more environmentally sustainable growth, further social development, the elimination of poverty, the reduction of inequality in lower-tiered regions, and the strengthening of key Chinese institutions.
According to a statement posted on the Ministry of Finance's website, China apparently still needs the support of the World Bank given that it is technically still a developing country. At the same time, the World Bank will stand to benefit from the country's growth in the coming years, the ministry claims.
The statement further pointed out the already 40-year relationship between China and the World Bank, particularly in areas such as finance and knowledge sharing. The ministry also stated that it is willing to further, strengthen the cooperation between the country and the World Bank in the coming years. The agency aims to achieve this through the enhancement of new loan programs and innovative financial projects, which will include poverty reduction-related projects and sustainable developments.
Prior to the approval of the five-year funding plan, reports citing sources close to the matter have claimed that some US representatives at the World Bank's board had objected to the lender's decision. In response to the news, China's Foreign Ministry had stated that the the country continues to be an important partner of the World Bank and their partnership has proven to be mutually beneficial. The Ministry of Finance also clarified that China's Country Partnership Framework the program was supported by the vast majority of the World Bank's board during discussions.
Chinese Foreign Ministry spokeswoman Hua Chunying mentioned at a press conference that the long-standing relationship between the country and the World Bank has remained successful. Through their cooperation, China has also been able to share its successful experience with other developing countries.
