Announcement of Rural Enterprises in China to Adopt New Technologies on December 6, 1990

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. * Telephone: (202) 477-1234 ' gg NEWS RELEASE NO. 91/27 Contact: Richard Kollodge IDA NEWS RELEASE NO. 91/26 (202) 473-1792 RURAL ENTERPRISES IN CHINA TO ADOPT NEW TECHNOLOGIES WASHINGTON, December 6, 1990 -- Rural enterprises in China will get a boost from a program to help these firms adopt new technologies and management systems. The program is being supported by a $50 million loan from the World Bank and a credit of SDR 45.1 million ($64.3 million) from the International Development Association (IDA), the Bank's affiliate that lends on concessional terms to the poorest countries. "Township and village enterprises (TVEs)"--many of which are owned by community organizations--account for about one-fourth of China's industrial production, and over the past decade their output and employment have grown much faster than those of the state firms. However, they frequently lack access to the skills and technologies they need to raise their efficiency and improve the quality of their products. The program will make credit available to selected TVEs in Jiangsu and Jilin provinces and Shanghai Municipality to help them acquire technologies that will boost their productivity. The program includes support for training of managers and technicians in the rural industries to help them streamline their operations and make them more profitable. Expert advisory services will also be provided to several government agencies in charge of technology diffusion to help them carry out the program and strengthen the system for lending to rural enterprises. The World Bank loan is for 20 years, including five years of grace, with a variable interest rate, currently 7.72 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.25 percent on the undisbursed balance. The IDA credit is for 35 years, including 10 years of grace; it carries no interest, but has an annual charge of 0.75 percent on the disbursed balance and a variable charge of up to 0.5 percent (currently zero percent) on the undisbursed balance. Note: Money figures are in U.S. dollar equivalents. IDA credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a "basket" of currencies. The U.S. dollar equivalent of the SDR amount of the IDA credit reflects the exchange rates existing at the time of the negotiation of the credit.