Announcement of China Promotes Development of Industries on June 1, 1989

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. *Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 89/82 Contact: Richard Kollodge (202) 477-4507 CHINA PROMOTES DEVELOPMENT OF INDUSTRIES WASHINGTON, June 1, 1989 -- Hundreds of small and medium-sized industries in China will be able to modernize their operations, increase production and compete in world markets as a result of a project being supported by a $300 million World Bank loan. Since the 1950s, industrial production in China has been growing about 11 percent a year. Industry now accounts for about half of the country's gross domestic product. But continued growth in the sector--especially among smaller, light industries--is constrained by problems such as obsolete equipment and inefficiencies in production. Funds from the World Bank loan will be channeled to eligible industries through the China Investment Bank (CIB) to help them finance new technologies aimed at improving efficiency and streamlining operations. The $460 million project also includes technical assistance and measures to increase CIB's capacity to manage its investment program and enter into new financing arrangements that are in line with economic reforms under way since the mid-1980s. The World Bank loan is for 20 years, including five years of grace, with a variable interest rate, currently 7.65 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on the undisbursed balance. Note: Money figures are in U.S. dollar equivalents.