Announcement of China Shanghai Industrial Development Project on February 1, 1991

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. 91/39 Contact: Richard Kollodge Tel: (202) 473-1792 CHINA SHANGHAI INDUSTRIAL DEVELOPMENT PROJECT Following are details of a project approved by the World Bank's Board: DATE: Feburary 1, 1991 WORLD BANK GROUP SUPPORT: World Bank loan: $150 million. The loan is for 20 years, including five years of grace, with a variable interest rate, currently 7.73 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. TOTAL COST: $319.6 million OTHER FINANCING: Participating financial institutions, $139.2 million; Shanghai Municipal Government $30.4 million IMPLEMENTING AGENCY: Shanghai Municipal Bureau of Finance ESTIMATED COMPLETION DATE: 1996 PROJECT DESCRIPTION: The objective of the Shanghai Industrial Development Project is to implement a technological and organizational restructuring program in four priority industrial subsectors: electronic components, precision instruments, electrical apparatus, and printing machinery. It will promote increased efficiency and greater domestic and international competitiveness in these subsectors through: (a) rationalization, modernization, and expansion of plants in the four subsectors based on sound product and market strategies, upgraded technologichl and , manufacturing capabilities, and clear financial and economic performance criteria; (b) organizational restructuring and upgrading of internal enterprise management systems; and (c) subsector policy reforms. The project includes three main components: (a) financial assistance for technological restructuring of enterprises in the four subsectors; (b) technical assistance to support organizational restructuring, upgrading management, and project implementation, including training, computer hardware and software, and management consultancy services; and (c) institutional development assistance for economic policy making and the participating financial institutions in Shanghai. Proceeds of the loan will be onlent through the participating financial institutions to finance the foreign exchange costs of investment subloans, goods under technical assistance subloans, and consultant services.