China - Sichuan Agricultural Development Project

6II XzzI/ - DocumWnt of The World Bank FOR OMCLAL USE ONy Rpoit No. P-5716-CHA MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 107.7 MILLION TO THE PEOPLE'S REPUBLIC OF CHINA FOR THE SICHUAN AGRICULTURAL DEVELOPMENT PROJECT JUNE 15, 1992 MICROFICHE COPY Report No. P- 5716-CHA Type: (PM) KIM,H. / X84057 / A-7035/ EA2AG This doc-wnt has a resticted distib and may be ue by reipients only In the perfrma of tidr offical dutie Its cosents may not otherwie be dislsd witout Wodd Bank autoration.  CURRENCY EQUIVALENT (As of February 5, 1992) Currency Unit - Yuan (Y) $1.00 - Y 5.38 Y 1.00 - $0.186 FISCAL YEAR January 1 to December 31 WEIGETS AND MEASURES 1 meter (m) - 3.28 feet (ft) I kilometer (km) - 0.62 miles I hectare (ha) - 15 mu 1 ton (t) - 1,000 kg - 2,205 pounds 1 kilogram (kg) - 2.2 pounds ABBREVIATIONS AND ACRONYMS ABC - Agricultural Bank of China ADP - Agricultural Development Project ElA - Environmental Impact Assessment EMP - Environmental Management Plan O&M - Operation and Maintenance PHO - Project Management Office  FOR OmCIAL USE ONLY CHINI SICFPAN AGRICULTURAL DEVELOPMENT PRQJECT Credit and Project Summary Borrowers People's Republic of China Bene'iciary: Sichuan Province Amounts SDR 107.7 million j$147 million equivalent) Termes Standard, with 35 years maturity Onlendini Termas Onlending rates to productive entities will be no less than the Agricultural Bank of China charges for loans for similar purposes and terms, i.e., positive in real terms and carry- ing a positive spread. Financing Plan: Local Forei2n Total --- $ million) ------ Central Government 17.0 0.0 17.0 Provincial/Prefecture Govts. 45.5 0.0 45.5 County Governments 19.0 0.0 19.0 Local Banks 9.0 0.0 9.0 Special Poverty Alleviation Funds 10.0 0.0 10.0 Enterprises and farmers 40.1 0.0 40.1 IDA 61.5 85.5 147.0 Total 202.1 85.5 287.6 Economic Rate of Return: 26 percent Staff A22raisal Report: Report No. 10322-CHA Maps: IBID Nos. 23092, 23094 and 23480 This document has a restricted distribution and may be used by recipients only In the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  MEMORANDUM AND RECOMMENDATION OF TIE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THU E ECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE PEOPLE'S REP LIC OF CHINA FOR TEE SICHUAN AGRICULTURAL DEVELOPMENT PROJECT 1. The following memorandum and recommendation on a proposed Credit for SDR 107.7 million ($147 million equivalent) to the People's Republic of China is submitted for approval. The proposed credit would be on standard IDA terms with 35 years maturity. Proceeds of the IDA credit would be onlent to Sichuan Province at en interest rate of 5 percent, with a repayment period of 15 years including a 5-year grace period. The foreign exchange risk would be borne by Sichuan. Onlending rates to final beneficiaries would be no less than the Agricultural Bank of China (ABC) charges for subloans for similar purposes with similar maturities. Part I: COUNTRY POLICIES AND BANK GROUP'S ASSISTANCE STRATEGY 2. A country economic report, entitled "China: Country Economic Memo- randum: Reform and the Role of the Plan in the 1990s" (Report No. 10199-CRA), based on a mission in May/June 1991, is being circulated separately to the Executive Directors. 3. China's reforms since 1978 built upon initial conditions which were in many ways unique. Socialism was essentially homegrown, sand its first 30 years bequeathed a legacy of solid social achievements, capable local adminis- trations, substantially modernized agriculture and a large industrial base, especially in heavy industry. The flaws included lack of incentives, isola- tion from the outside world, excessive stress on self-sufficiency even at the local level, and an industrial sector whose output pattern and geographic distribution largely reflected strategic rather than economic imperatives. The reforms of recent years have been characterized by gradualism, increased decentralization, a pragmatic willingness to settle at times for 2&rtjla progress and--despite the occasional "two steps forward, one step back"--an overall momentum reflecting the self-reinforcing nature of reforms once com- menced. 4. These reforms have taken place across the economy. Replacement of the communes by family farming on a long-term leasehold basis, and relaxation of controls over pricing and marketing of farm produce (now mostly confined to grain and a handful of other staples), led to expansion and diversification of agricultural output, as well as the emergence of nonstate enterprises in industry, commeres and services as a highly dynamic force in the overall economy. Progressive opening of Special Economic Zones, coastal cities and inland areas to direct foreign investment (DFI) has made China one of the most attractive locations in the region for export-oriented private foreign invest- ment. Reform of state-owned enterprises (SOEs) has been aimed at marketiza- tion rather than privatixation, including greater management autonomy and replacement of gross output by profit-oriented indicators as objectives of SOE# under the "contract mana8ement system." After a slowdown during the  1989/90 austerity period, price reforms have resumed. Many consumer items have been removed from controls, and there has been significant recent prog- ress in adjusting Plan prices. 5. In the financial sector, a financial system comprising banks, non- bank financial intermediaries antd an emerging capital market has replaced pre- 1980 monobanking arrangements. There has been some increase in bank autonomy, though heavy Government involvement still remains in major lending decisions. Some progress has been recorded, meanwhile, in expanding indirect taxation, but negotiation of tax payments is still rife. Foreign trade reform has led to a massive increase in exports, reflecting both decentralization of trade management and greater use of market incentives, erosion of subsidies and implicit trade taxes, retention rights for firms to hard currency earnings, and opening-up of parallel markets in foreign exchange. These economic reforms have been accompanied by the general maintenance of strong social indicators (despite pressure in some poorer regions). New SOE workers have been placed on contract, rather than lifetime employment, for example, and pay is more closely linked to results. But China has adopted a generally cautious approach to labor market reforms (redundancy, labor mobility) in keeping with the country's emphasis on social stability. 6. Growth has averaged 9 percent and, although savings and investment rates remain high (close to 40 percent of GDP), "extensive" resource-based growth has been increasingly replaced by significant productivity Improvement, first in agriculture and more recently in industry. Although nonstate produc- tivity growth has been fastest, SOS productivity has also shown gains. This reflects both enhanced incentives and competition and greater management autonomy in allocating investment and workers within the enterprise. However, many reforms are still partial in nature. The key overall challenge remains finding ways to improve resource allocation more broadly across the economy. 7. Among the most troubling symptoms of China's economic problems have been rising state enterprise losses. As yet, China has been unable to enforce financial accountability on state firms; underlying these soft budget con- straints have been employment concerns, heightened by heavy reliance on enter- prises to provide housing and (unfunded) pensions, and the limited development of unemployment safety nets. Development has also pushed up against infra- structure constraints: investments in transport, telecommunications, energy and irrigation have lagged behind those in industry, with unrealistically low pricing policies contributing to inefficient consumption patterns as well as financing difficulties. 8. Recent Developments. The most recent and severe of the reform-era zycles was triggered by the pre-announcement in mid-1988 of plans for sweeping price adjustments. A rapid acceleration in inflation (close to 30 percent on a year-end basis) and a marked deterioration in the external balance prompted the authorities to shelve the price reforms in favor of a broad stabilization program. It comprised both traditional administrative measures (credit, import and price controls, public investment cuts, etc.) and more aggressive use than in the past of market-oriented Instruments such as interest and exchange rate policy. The leadership's preoccupation with stability acquired an additional political dimension in the wake of the events of June 1989 and  -3- in view of consequent domestic and international uncertainties then facing the country. 9. Coordinated and determined application of multiple economic policy instruments yielded rapid and powerful results: in little over a year, infla- tion had beon reduced to low single-digit figures and the balance of payments deficit replaced by a surplus of unprecedented size. The Impact of China's austerity program on the real economy was felt from mid-1989 to mid-1990, which saw little or no real growth. However, once recovery began, it took off rapidly. Overall CUP grew by 5 percent in 1990 and 7 percent in 1991. After virtual stagnation in 1990, the level of consumer demand recovered in 1991, and is continuing to grow, though inventories remain high. The economic down- turn strongly affected China's state-owned enterprises, and sharply reduced their profitability. However, there was no noticeable impact on tax receipts, and the visible fiscal deficit was still manageable, only 2.1 percent of GDP in 1990 and 2.6 percent in 1991. The public sector borrowing requirement grew, however, from 8 percent of GDP in 1987 to about 11 percent in 1990. The strongest performance was in the external sector, with record external sur- pluses in 1990 and 1991, largely reflecting continued strong export perfor- mance, in response both to declining domestic demand and to improved incen- tives, notably successive real devaluations. 10. China emerged from recession with strong output growth accompanied by low inflation and a secure external position. However, the rapid growth of credit, if continued, could lead to the reemergence of inflation; a moderate credit stance is, therefore, called for. Moreover, the persisting severe difficulties of the SOEs justify renewed focus on restructuring and reform issues. The growing open and quasi-fiscal deficit also merits attention, not only to SOEs, but also more generally to fiscal and financial sector reforms. Develonment Is_sues and Policy A enda 11. Constraints to China's development come largely from two sources: accumulated infrastructure bottlenecks and the policy framework. The latter has two main aspects: the need for reform of macroeconomic policy instru- ments, to permit more stable growth without the cyclical disruptions of the 1980s; and the need for additional reforms in the productive sectors, to encourage further efficiency gains and improve resource allocation. While concentrating on stabilization during 1988-90 caused a slowdown in reform, the past year and a half has witnessed revival on several fronts: even if some of the more dramatic steps taken, including unprecedented price rises for grain and rail services, must be viewed in part in a fiscal context. These reforms, extensive local experimentation and the recent Outline of the Ten-Year Devel- opment Program and of the Eighth Five-Year Plan (SFYP) for 1991-95 yield some perspective on the authorities' current thinking on the major development and reform issues now outstanding. Beijing's determination to press ahead vith reforms has beoen further emphasized by the developments of recent weeks fol- lowing the March 1992 meeting of the National People's Congress. 12. The Plan for the next few years envisages a moderation in growth rates, to avoid repeated cycles and achieve better intersectoral balance. One component of balanced growth needs to be more adequate financing of infra- structure investments. The Plan recognizes this, though it does not provide  - 4 - full details of where the requisite funds will come from. In this context, a potentially important initiative has been the establihbment of sectoral investment funds to plow back revenue from tariff increases. A second aspect is the need for faster growth in China's underdeveloped service sectors. With agriculture and state industry both characterized by surplus labor, services (together with nonstate industry) will need to absorb many of the new entrants to the workfor.es the Plan acknowledges this, though it provides only prelim- inary Indications on policies to achieve the goal. Third, compared to the previous Plan's pursuit of a "coastal" strategy, the present document puts more emphasis on regional balance. Regardless of overt regional policy, how- ever, coastal areas enjoy certain built-in locational advantages given China's turn to more outr'ard-oriented development. Prereform policies, largely defense-driven, ovrstressed the dispersion of industry to often remote inte- rior locations: a more rational strategy for the interior will need inter alia to combine better transport infrastructure, fairer pricing policies for raw materials and more openness to internal labor migration. 13. Regarding the instrwments of macromanageme3t, possible fiscal reforms raise difficult issues of center-provincial relations [China: Revenue Moilization and Ta PolicY, Report No. 7605-CiA (1989)1. Lack of a national tax service makes the central government unusually dependent on local adminis- trations for the raising of revenue, which is shared between different levels according to periodically renegotiated contracts (extending down to the indi- vidual anterprise). This largely precludes active central control over taxa- tion from either a stabilization or an incentive viewpoint, and has limited the buoyancy of central revenues. Experiments with standardized rather than negotiated corporate taxation are under way, and the center has expressed the intention to Increase its control over the tax system. The short-term response to budgetary problems, however, is expected to be one of continued (though not entirely unsuccessful) Improvisation with new revenue sources, with more fundamentsl changes postponed to later in the decade. At the same time, the budget deficit has clearly become the leading source of pressure for price reform, and ha. also forced the authorities to think more seriously about loss-making state enterprises. 14. In the financial sector, the general level of interest rates has usually been positive in real terms (though preferential rates for favored sectors and projects remain common). The authorities seem to be taking on board Bank and Fund advice to strengthen the capability of the central bank (People's Bank of Chinat PBC) in macromanagement and are also initiating mea- sures to reinforce the capacity for prudential regulation and supervision (Chinat Financial Sector Review, Report No. 8415-CHA (1990)]. The Plan's message on lending autonomy for the banks remains muddied, however. A worry- ing dimension is the extent to which the burden of financing infrastructure investments and state firms' losses appears to have been partly shifted from the budget to the beaking system, with likely implications for sector's finan- cial soundness as yet unquantified. More promising are expressions of interest in segregating directed policy lending from comercial loans. 15. The authorities have recently given increasing attention to the remaining distortions in the Plan prices of grain, transport and energy, as well as the anomalies and potential for abuse created by wide price differen- tials under the two-tier (Plan and market) pricing system. In several cases,  Plan prices have been raised sharply. This process useds to be continued aggressively, and seems likely to be. But attenticn is also required to developing the institutional, regulatory and infrastructural basis for better- functioning markets. China needs to combat more effectively the tendency of provincial governments to compound, through internal trade restrictions and the orientation of their investments, the fragmentation of domestic markets created by inadequate communications infrastructure. Continued efforts at reforming pricing and marketing in the key grain sector (where Government con- trols and subsidies not only burden the budget but also perpetuate regressive effects on income distribution, regional production and consumption distor- tions and inefficient distribution systems) are a particular priority (Chinas Manating an Agricultural Transformation: Grain Sector Review, Report No. 8652-CIA (1991)]. 16. In many ways the most difficult--as well as the most crucial--policy area of all, however, touches the future of the SOS sector. The SOEs' demana for subsidies and credit contributes substantially to the nation's fiscal and financial difficulties. At least a third of such firms currently lose money. While, in certain sectors such as coal, this may be attributed in part to distorted output pricing (and thus prove amenable to improvement through price reform), 1: is clear that for many firms the problems go deeper and that major restructuring will be needed to achieve viability and efficiency. Greater distance also needs to be put between public administration and enterprise management, so that the latter may be held accountable against hardened budget constraints. But hard budgets, implying possible bankruptcies and unemploy- ment, will be socially realistic only to the extent that f"cr 100 million SOB workers and their dependents, largely in urban centers, can be weaned from their dependence on their workplace for housing and pensions, and as a social- ized unemployment compensation system is developed. 17. The Government's approach to these issues operates on several levels. It has embraced the need for reforms in social security (socialized pension pooling, unemployAent benefits) as well as in urban housing [Chinas Reforming Social Security in a Socialist Economy, Report No. 8074-CHA (1990) and China: Imilementation Overations for Urban Housint Reform. Issues and Ilementation Qgtions, Report No. 9222-CHA (1991)). In the latter field, detaching provision from enterprises will require very substantial increases in rents to make housing corporations financially self-supporting, or home purchase, unless heavily subsidized, an attractive alternative. The center has provided broad guidelines for these reforms, though the details and pace of implementation are being left largely to individual cities. Some munici- palities are aggressively pursuing rent reform (with compensating wage adjust- ment) and sustainable financial solutions, but others lean towards deeply discounted sales and the use of compulsory savings schemes to fund subsidized mortgages. i8. Overall, the need for SO restructuring is now being taken far more seriously. There are some indications that the a4thorities are starting to adopt a more critical attitude towards fin-ial flows to SOEs, and also that selected SOB bankruptcies are becoming more acceptable. Experiments are under way with converting selected SOEs into joint-stock enterprises, and in some instances floating at least a minority of their shares on nascent stock ex- changes. Privatization of SOEs per se, however, does not appear to be on the  current agenda. Increased emphasis is being placed on the formation of "en- terprise groupo," cutting across administrative boundaries, and oa mergers more generally, in part to allow labor redeployment to be internalized. 19. The external side has seen extensive changes, Including a dramatic increase in exports, as well as In imports of technology-embodying capital goods. It has witnessed decentralization of trading authority and important reductions in pricing distortions, including the emergence of the parallel market in foreign exchange and the recent elimination of central export subsi- dies. Trade still remains largely managed, and it is not yet clear that GOC sees import liberalization (e*g., for consumer goods) as an intrinsically beneficial source of competition in domestic markets. China is, however, keenly pursuing GATT membership. On a pragmatic level, and in part reflecting stresses created by the present payments surplus, extensive tariff cuts were recently announced. Further import relaxation is likely to follow, possibly accompanied by action on currency convertibility. 20. China's leaders have always stressed the importance attached to combatting poverty. According to our forthcoming Poverty Study, the number of absolute poor, long predominantly rural, declined by about 60 percent over the decade through 1988 to 80-90 million. The influence of the agricultural reforms has been spread widely by the egalitarian distribution of assets, including farmland, within individual communities, and supplemented by a mea- sure of fiscal redistribution between provinces. However, a slowing of the decline in incidence of poverty since 1983 bears witness to the increasing concentration of the poor in hard-core, resource-poor regional pockets, fre- quently also characterized by enviromental degradation exacerbated by popula- tion pressures and post-1949 controls on migration. Evidence is mounting, furthermore, that fiscal decentralization--in many respects beneficial--has compounded the difficulties of such areas by placing access to basic education and health care outside the reach of poorer families. While some of the poor can be helped in situ, with more sustainable farming technologies and more effective budgetary transfers in the social sectors, many others have begun in recent years a spontaneous process of migration to more prosperous regions. Official attitudes to this process (and the ensuing "floating population") remain ambivalent, however, and no consistent policy has emerged. 21. Threats to China's environment are not confined to unsustainable cropping practices. The resource balance has almost invariably been precari- ouss the _..untry accounts for over a fifth of the world's population but only one tenth of the world's cultivated land. Rapid industrialization, both in urban areas and increasingly in the countryside, was long combined with a weak regulatory framework to cause severe problems of water pollution and atmospheric contamination [China: Environment Strateav Pager, Report No. 9669-CHA (1991)]. Distorted pricing (e.g., for coal and water) further aggra- vated the problem. More recently, greater focus has been given to environmen- tal protection and major progress seen in increasing public awareness, enacting a sound body of regulations and building up institutional capacity. At local levels, however, the lack of satisfactory distinction between enter- prise ownership and regulation functions still impedes effectiv enforcement and much remains to be done in strengthening regulatory capabilities.  - 7 - 22. While China's leaders make a careful link between economic stability and reform progress, a more fundamental point concerns the long-term feasibil- ity of a market-socialist hybrid. It can be argued from international experi- ence that public enterprises will not match the efficiency and dynamism of private firms unless, as a minimum, they are exposed te hard budgets and vig- orous competition from a large domestic private sector and/or international trade. However, Chinass official definition of the "public sector" also includes the rapidly expanding collectives, such as China's township and vil- lage enterprises (TVMU), for which no close international parallel exists. TVEs are highly entrepreneurial and market-oriented, making China's markets significantly more competitive over time. Social obstacles to hardened SOE budget constraints are being tackled, while experiments are being undertaken with SOE bankruptcy, mergers and share issues, further blurring the concept of public ownership. If policies remain on course, therefore, the Chinese model can be expected to continue developing along markedly distinctive lines. Macroeconomic Prospects. External Capital Requirements and Creditworthiness 23. China's macroeconomic prospects are in general projected to remain strong, and we expect to see the continuation of incremental productivity- enhancing reforms. Assuming the effective translation into reality of the type of reform program set out in the Government's Plan document issued in early 1991, we would anticipate GDP growth proceeding slightly faster than the Plan's rather conservative target of 6 percent per annum (around 7.5 percent), accompanied by a gradually falling ICOR (responding to reform, especially within industry), with the rate of investment falling from 39 percent of GDP in 1990 to 34 percent by the end of the decade (and thus faster consumption growth). Inflation control is assumed to remain a priority--hence the some- what lower rate of overall growth than in the 1980s--and inflation is expected to be around 6 percent. The export (volume) growth rate is set at 8-9 per- cent, while imports are projected to grow quite rapidly for a year or two, as their present compression is relaxed through liberalization measures, and thereafter at a similar rate to exports. The current account deficit is expected to remain below 2 percent of GDP, keeping debt within manageable levels. 24. Possible downside risks may be identified on either the domestic or international fronts, though in neither case is a high probability attached to such risks. Should the current momentum of reform stall, we would see the results as mainly reflected in the ICOR's performance, and hence in a slower rate of consumption growth. Similarly, any increase in trade barriers to Chinese goods among overseas trading partners would almost certainly be reflected in a reduced level of capital goods imports, and hence a lower pace of modernization, rather than a deterioration in the external account (in any case, recent experience suggests that China will continue to move to accommo- date its partners' concerns on the import side). 25. There is also a possibility of a still further accelerated attack on reform issues over the next few years. The call for faster progress has recently been taken up by the March 1992 National People's Congress. W would see such a course as resulting in three primary effects: GDP would rise faster (an assumed 8.5 percent) in response to stronger efficiency gains, more products would become export-competitive (raising average trade levels) and,  - 8 - in response, DPI would rise more rapidly, which would reduce debt service levels. 26. External Financina Requirements. The 1991 surplus is assumed to be ellminated over the next year or sot a todest trade deficit has been China's usual stance In most recent years, imports are at present growing at an annual rate of about 20 percent (with export growth at about 14 percent), and earlier experience suggests that this response to reflation and the relaxation of import restraints will be maintained for some time. Under the assumption that there will no longer be a desire to continue building up reserves, these are projected to fall slowly in relative terms from the present abnormally high 8 months of Imports to about 3-4 months by the end of the decade. The deficit is projected to expand only fairly gradually, rising from $10 billion in 1995 (1.7 percent of GDP) to about $15 billion in the year 2000 (1.4 percent of CDP). 27. With only very small additions to the absolute level of reserves, the net external financing requirement would barely exceed this deficit. An average of about $5 billion is expected to come from DPI, and the remaining external financing requirement would average about $7 billion per annum over the decade. Official financing is projected to include Japanese credits (run- ning at just over $1 billion per year), and access to ADB ordinary resources (projected by ADB to double from the present level of $500 million per annza, on a commitment basis, by 1993). Other sources are comparatively small in aggregate in relation to the Bank Group and these two. Given China's expected continued creditworthiness, the additional commercial borrowing required would continue to be on a voluntary basis, and debt rescheduling is projected to be neither necessary nor sought by the Government. 28. Creditworthiness. China would continue to enjoy a strong credit- worthiness position, with all indicators remaining very good. Total debt outstanding stood at only 15.8 percent of GDP in 1991 and this is projected to fall to less than 12 percent in the year 2000, and stay between these two levels throughout the decade. The associated debt service level also remains healthy, declining from 10.1 percent of export earnings in 1991 to 9 percent in 1995 and 8 percent in the year 2000. The indicators for lank exposure are also projected to remain within acceptable levels. China's IBRD debt out- standing and disbursed (DOD) as a share of the Bank total is very far from the official 10 percent ceiling, standing at only 3.2 percent at the end of FY91. Within the period under consideration, the DOD ceiling appears unlikely to emerge as a relevant constraint. Bank Assistance Strategv 29. The Bank's Dialoaue. The Bank has a strong and active dialogue with the authorities. Our policy-oriented ESW program is received seriously at both leadership and official levels. As the discussion of the Gcovernment's agenda above suggests, there is broad consensus on the overall direction of reforms and on the basic rationale for a gradualist strategy under Chinese circumstances. A number of aspects remain, however, wher, we consider that more effort is needed.  -9- 30. The Government is responding to our repeated emphasis on nrice reform. However, while ongoing price adjustments, especially for grain and energy, will remove the most serious distortions, more work 1S also needed on increas na the role of markets. This is particularly relevant for key agri- cultural outputs and inputs (grain, fertilizer). In the financial sector PBC's capability to supervise and regulate the banking system remains weak. In addititon, the authorities are still relying unduly on directed credit, with a complex range of special, subsidized interest rates to favored (often SOE) sectors, and predictable distortions in resource allocation. Resolving these problems will have to mo-e in parallel with progress on price and enterprise reforms, as well as adoption of innovative approaches to financing public investment programs (e.g., separating infrastructure financing from commercial banking through promotion of investment corporations or funds and/or expanded use of bonds). Putting in place a strengthened regulatory and institutional framework for the sector must, however, commence with measures to upgrade the capacity of PBC. This process is already getting under way and is one to which the Bank plans to contribute through a technical assistance project scheduled for consideration by the Executive Directors later this calendar year. 31. Enterprise reform, as stressed above, is the central challenge, and one which no meaningful program of development assistance for China can avoid: promoting nonstate enterprise development, while important in its own right, is not a substitute for SOS reform. Enabling the SOEs to become efficient and fully competitive is a multidimensional effort: finding new institutional mechanisms for the exercise of ownership; clarified legal and regulatory frameworks; new relationships between supervisory bodies and enterprise management; upgrading enterprise managers' ability to exercise their responsi- bilities more effectively; rapid development of alternatives to the current social obstacles to enterprise reform, In particular through housing VAn social security reforms; And further improvement of the competitiveness of domestic product markets :hrough continued price reforms, fostering the role of the nonstate sector and addressing policy and infrastructural barriers to cross-provincial trade. These systemic changes need the reinforcement of meaningful efforts to curb budgetary subsidies to SOBs, standardised enter- prise tax rates, and more effective internal factor markets for capital, urban land and labor. The authorities are still working, through experimentation, study and debate, on 4efining a coherent overall strategy in this field. The Bank plans to direct both ESW and future lending operations, appropriately conditioned, to helping find realistic and relevant models of public enter- prise reform for China. 32. Utilization of Bsnk Assistance. Despite the dislocation of new lending comitments over 1989190, and their own need to focus on short-term concerns, the Bank's ESW has continued to command serious attention among policyuakers in Beijing. Supervision ratings for Bank projects dipped in FY90, in part reflecting stresses caused by the austerity program. FY91 and FY92 showed some recovery, however, and the absolute ratings have continued throughout to be substantially superior to either Bankwide or regional aver- ages, an assessment confirmed by PCR/Project Audit findings. Achievement of development objectives and compliance with legal covenant continue to be rated highly, and earlier procurement delays have been addressed by streamlining procedures (the CIR process has been active and constructive).  - 10 - Areas where further improvement is needed include training and technical assistance. More broadly, the supervision burden can be expected to intensify further as the reform objectives of operations become more ambitious and implementation responsibilities continue to be decentralized. A recent PCR for the Department's only fast-disbursing policy-based loan to date, the FYJ8 Rural Sector Adjustment Loan, concludes that less progress than projected was achieved during the disbursement period on key policy aspects (e.g., reform of grain pricing and marketing), largely due to the authorities' focus on stabi- lization, but sees more recent signs af revival in rural reform. 33. Our mandate in China, as in all borrowing countries, is to support broad-based economic development and to combat poverty. An effective program of development assistance for China must balance needs for help with policy and institutional reform, technological modernization, infrastructural strengthening, environmental protection and poverty alleviation. Provided overall and sectoral policies continue to be seen as conducive to development, these needs justify a program which is both substantial in size by our own institutional standards, and also sectorally and geographically broad-based. China's dynamism and creditworthiness continue to create a prima facie case for a program comparable in absolute size to that provided to any other bor- rowing member. Relative (per capita) assistance levels will, however, remain substantially lower than those enjoyed by most other Bank Group borrowers. The case for providing a significant proportion of our assistance on IDA terms also remains robust. 34. A vigorous policy dialogue at national level, and a strong reform content to our lending, are considered essential. In certain subsectors and policy areas, operations will most appropriately be mounted on a national basis (e.g., railways, certain industrial subsectors, financial sector devel- opment). Investment responsibilities in most fields, however, have been largely delegated to nrovinces or cities. Moreover, China's gradualist model often makes use of prior policy experimentation at these levels, which can hence be at the cutting edge of reform and an appropriate focus for Bank sup- port. Support for industrial and urban reform (including urban environmental lending) will be concentrated in provinces and cities (and selected subsectors at the na.lonal or cross-provincial level) which are at the frontiers of reform and experimentation. At present, that seems likely to involve some continued emphasis on coastal areas, but this focus remains subject to review. In developing our operational support for urban housing and social security reform, for example, we have made it fully explicit that only those cities prepared to implement meaningful reform packages will receive assistance, rega.dless of location. Assistance for social sector development (education, health) will be concentrated primarily in poorer rural areas, mostly in the interior, where achieving and maintaining minimum acceptable standards is most at risk. A substantial share of the aaricultural portfolio, including the present project, will also be used to address the interrelated problems of rural poverty and environmental degradation in the most vulnerable areas of the hinterland. Selection of investments in infrastructure will be based on systematic evaluation of strategic priorities in tackling bottlenecks on a nationwide basis. 35. The ESW irotram would build on and deepen the achievements of recently completed work. In keeping with the priorities set out above, it  - 11 - heightens the emphasis on industrial reform and restructuring, as well as on regional integration and relations (fiscal and other) between different levels of Government. In addition, we recognize the need to increase the priority attached.to trade policy, and are stepping up our ESW effort on this front. Proposed sector-specific studies are also planned. 36. These reform areas would be supported by continued Bank involvement in China's infrastructure development. A strengthened program of assistance for urban manaaement, with special focus on the urban environment, will advance the dialogue with important, reform-minded city governments. In transport, we pln to initiate sector lending for the railways, including operationalization of earlier studies on investment planning and tariff set- ting. A broadened policy dialogue on highways will target such key issues as road financing and trucking development, while we also plan to explore the scope for support of the neglected water transport subsector. In energy, continued emphasis on further tariff reform, improved investment planning and technology transfer in electric power, together with heightened focus on environmental protection, resettlement and institutional development, will be accompanied by a new program of work on energy conservation. Consistent with national and global energy and environmental priorities, we plan operational involvement in onshore natural gas development, an expanded dialogue on coal pricing and exploration of the potential for a resumption of lending for coal sector modernization. 37. In agriculture, a strong program would promote sustainable agricul- tural aud forestry practices in impoverished and environmentally vulnerable regions, and continued assistance in upgrading farm support services and cross-regional water management. The proposed project reflects this strategy. 38. In education and health, IDA would continue to emphasize promoting the efficient and affordable delivery of basic services (with special focus on girls' education and maternal and chili health) in China's poorest rural areas. Complementing the enterprise reform priority, the scope for contribut- ing to industrial restructuring through worker retraining programs would be explored. 39. Poverty Alleviation and WID. Our agricultural portfolio is planned to include operations targeted at enhancing productivity aud achieving sus- tainability in some of China's poorest regions, while the recent refocusing of our social sector program on poor areas is also consistent with the recommen- dations of the forthcoming poverty study. WID concerns will continue to be addressed most explicitly under our health and education programs, but we are also experimenting with agricultural training and production components directly targeted towards women, including components of the proposed project. 40. Environment. China's policies, programs and institutions in the environment sector are among the most comprehensive of any Bank member coun- try, and conform substantially to the IDA Environmental Action Plan require- ment. Environmental aspects will be uppermost in three or more marginal lands agricultural projects, a forestry sector operation and a series of provincial/ urban environment projects. GEF-financed studies on greenhouse gas emissions and biodiversity are also under way. Studies on ozone-depleting substances (ODS) are under preparation with support from UNDP and the Montreal Protocol  - 12 - Interim Fund (HPIF), and vill result in one of the largest ODS projects to be funded by the NPIF. Following our pilot program of TA to the National Envi- ronmental Protection Agency (NEPA), funded under the Japan Grant Facility, we plan to undertake a substantial TA program for China's environmental protec- tion agencies. We also plan to add to the ESW program a study of provincial and urban environment msnagement issues, inter alia to provide policy input to future projects. 41. Public Sector Reform and Private Sector Development. Experiments with new models of ownership and corporate governance, management and regula- tion for SOEs will be supported under future industrial operations, while pro- posed work on housing and social security also has direct relevance to enter- prise reform. Much of our rural credit lending has long gone to private or collective end-users, and our dialogue with the China Investment Bank (CIB) during preparation of the recent Rural Industrial Technology Project helped reform its previous exclusive focus on lending to SORs: subject to an enabling financial sector environment, follow-up is envisaged here too. Nonstate enterprise development in transport will be supported specifically through proposed work on trucking and possible water transport lending. Infrastruc- ture and urban projects will afm to Improve efficiency in planning and deliv- ering public goods, and cost-recovery will be central to our dialogue on irri- gation, transport, energy, water supply and municipal services. 42. Relations with the IMP and Other Sources of Finance. China has not drawn on IMF lending since a stand-by arrangement was agreed in 1986. The latest Article IV consultation noted the country's exchange restrictions and multiple exchange rate system, and the authorities have confirmed their inten- tion to unify the official and parallel rates. Bank and Fund staff continue to cooperate closely on monitoring macroeconomic developments and designing measures to strengthen PBC. Other multilateral and bilateral sources of fun- ding, including ADB, have generally looked to the Bank for leadership in over- all country relations. China's external debt management has been cautious, and the country continues to be seen as creditworthy by commercial banks, though the exceptionally low margins above LIBOR previously available were marked up to levels comparable to other East Asian borrowers after June 1989. Disputes over guarantees for a number of commercial loans, mostly incurred in 1985186, are being cleared up. Some lack of transparency remaiAs, however, over the definition of sovereign debt, which needs clarification if misunder- standings are to be avoided in future. 43. After the recent period of relatively limited lending activity, IFC is programming a renewed effort of project promotion and is considering open- ing an office in China. The Corporation also sees financial sector liberali- zation (including the establishment of stock exchanges in Shanghai and Shenzhen) as creating the opportunity for its Capital Markets Department to play a more active role. FIAS is helping GOC review and enhance the climate for DPT, an area where continued effort is still called for, while MIGA has received Preliminary Applications for Guarantees for 10 projects in China, though to date no Contract of Guarantee has been issued. Although the institutional division of international financing responsibilities vithin the Government still presents barriers to cofinancing, we plan to seek such financing for several upcoming operations. The proposed gas development pro- ject may prove attractive for private cofinancing, as may some possible indus-  - 13 - trial projects (e.g., telecommunications). We will explore possible Japanese cofinancing for upcoming railway and highways operations, as well as proposed water management projects. Although recent efforts to arrange an ECO for two power projects were not successful, they have prepared the ground in a way that should make future cofinancing essier on the Chinese side. Part II, THE PROJECT 44. Background. Agriculture in China, including crops, livestock, for- estry and fisheries, provides sustenance for over 1.1 billion peoplet it is an important oource of income for some 190 million farm families and accounts for about 30 percent of the country's GDP. Only about 137 million ha (14 percent) of China's land area of 960 million ha are arable. Farming systems are inten- sive, with heavy inputs of labor, chemical and organic fertilizers, and small machinery. Nearly half of the cropped area is irrigated. Foodgrains occupy about 70 percent of total cropland and account for about one third of the agricultural output. Intensive farming has allowed China to meet the basic food requirements of its population, about 22 percent of the world's total, and to produce an increasingly sophisticated mix of cash and commercial crops from less than 11 percent of the world's arable land. 45. China's decade-long rural reform program has revitalized the agri- cultural sector, provided impressive growth and structural changes through the introduction of the production responsibility system, increased producer prices, and enlarged the role of the market. These reforms have recently includeds the general fixing of provincial grain procurement quotas at sub- stantially reduced levels, with ever-increasing production increments priced at market-based negotiated prices; increased grain quota procurement prices for 1992, so that wheat and corn farm-gate prices now approach world levels; the conversion of most official interprovincial grain shipments from quota to negotiated prices; in 19911929 the first substantial increases (of from 132 percent to 160 percent) in urban ration grain and edible oil prices in 30 years; and the establisbment of fledgling grain commodity exchanges for all major grains in various Chinese cities (e.g., Zhengzhou, Changebun, Wbian, Harbin, Changsha). In the context of preparing a proposed Grain Distribution und Marketing Project, IDA is discussing with the Government a future reform program involving the further substantial elimination of grain consumption subsidies, the opening of the internal grain trade to all interested units and individuals, the thorough commercialization of grain wholesaling and retailing enterprises, establishment of a futures market in grain, and eventual market- determined pricing of virtually all grain in China. During 1978-90 the gross value of agricultural output increased in real terms at an average annual rate of 6 percent, substantially more than the 3 percent growth of the previous 25- year period. 46. Remarkable rural growth during the 19809 has increased per capita income and living standards of the rural population in China. Despite this success, however, rapid growth has also resulted in widening of income disparities between more prosperous coastal provinces and the poor and back- ward northwest and southwest parts of China. To help address this :mbalance, the central government of China in 1987 introduced the provincial agricultural development project (ADP) concept as part of its development strategy for  - 14 agriculture. The proposed project in Sichuan is the seventh ADP proposed for Bank financing. 47. Sichuan Province, located in the southwest, is the most populous province in China with over 108 million people, 92 million of whom are in agriculture. Of the total area of 57 million ha, 6.6 million ha (11 percent) are cultivated, of which about 42 percent is under irrigation. With one tenth of the nation's population to feed on one sixteenth of the land, half of which is mountainous, Sichuan had to develop irrigation systems from ancient times to intensify its grain production. Of over 33,000 irrigation schemes in the province, most of which are small-scale, the most famous and effective irrigation system is Dujiangyan, which was built over 2,200 years ago and is still operating. The proposed project is mainly located in the "central basin" which, with only 16 percent of the province's total land, produces more than 90 percent of the province's grain. With limited land, Sichuan is one of the poorest provinces in China. Farmers' annual per capita income is Y 558 ($103 equivalent), around 88 percent of the national rural average of Y 630 ($117). Of 214 counties in the province, 65 are classified as poverty coun- ties. The proposed project focuses on four relatively poor prefectures-- l4ianyang, Guangyuan, Nanchong and Qianjiang Prefectures. The average incomes of the project areas are all lower than the provincial rural average and range from Y 201 ($37) to Y 422 ($78), which amounts to only 32 percent and 67 per- cent of the national rural average. 48. Lessons Learned from Previous IDA Operations. Bank assistance to China's agriculture has supported the reform process, especially those aspects aimed at improving productivity, increasing productive off-farm employment in rural areas, developing an export orientation and increasing reliance on mar- kets. Lending to date to China's agricultural sector has included 29 opera- tions involving a total assistance of about $3.5 billion, covering virtually every agricultural subsector and every region of the country. Implementation of most of these projects is both on schedule and satisfactory. Six IDA- financed agricultural projects in China have been completed. The Project Completion Reports indicate that project implementation was generally success- ful and economic rates of return excellent. They stress the importance of competent project management and regular maintenance of equipment and machin- ery. Several lessons learned have been incorporated in the design of the present project: (a) assisting individual poor households in commercial activities is an effective means of income generationt (b) sustainable live- stock development requires appropriate management of natural resources, e.g., pasture; (c) adequate operations and maintenance (0&) is essential for effec- tive management of irrigation systems; (d) setting up a strong project manage- men* office (PMO) at the provincial, prefectural, and county levels is vital to successful project implementation; (e) adequate counterpart funding must be available in order for the project to be completed effectively; and (f) increased emphasis must be placed on efficient, commercially oriented man- agement of agro-industrial enterprises. 49. Rationale for IDA Involvement. The proposed project is designed to address the key constraints limiting agricultural productivity in Sichuan's poorest areas. Among them, the most pressing are the shortage and irregular availability of irrigation water, water and soil losses due to erosion, inade- quate and weak linkages between production, processing and marketing activi-  - 15 - ties, and limited technical and extension services to faemers. IDA involve- mcnt in the project vill make possible a large increase in incomes to farmers in some of Sichuan's poorest areas. Project design draws on the Bank's exten- sive experience in integrated agricultural development projects in China to address major constraints to agricultural productivity and rural incomes. IDA involvement would promote the efficient use of limited resources, help develop technologies for soil and water conservation, and enhance environmentally sound agricultural development by improving current practices and introducing proven protection measures. As part of the Government's efforts toward decen- tralization, this project has been planned and would be implemented by the provincial, municipal and county governments. The proposed project assists the Sichuan provincial government to: reinforce the foundations for moderni- zation already in place; improve the capacity for planning, msnagement, research and analytical work; and adopt new technologies for further moderni- zation. 50. Proiect Obiectives. The project's main objectives are tos (a) increase productivity of existing crops by increasing the land under irri- gation and by providing a more reliable water supply for drought protection; (b) provide a complementary package of integrated agricultural inputs, support services, adaptive research, training and technical assistance; (c) develop operation and maintenance plans =d establish policies for the proposed irri- gation systems, including the collecting of water charges for full recovery of operation sand maintenance costs; (d) expand soil conservation measures and reduce soil and water losses to prevent long-term siltation problems of major rivers, maintain soil fertility, and improve productivity of already eroded areas; (e) expand agroprocessing activities to utilize locally available raw materials; and (f) increase farmers' incomes in poor and remote areas where they are substantially below the national average, with particular emphasis on helping poor women. 51. Proiect Description. The project, to be carried out over six years, provides funds for: improvement and expansion of irrigation to 135,200 ha; establishment of two extensive soil conservation demonstration areas and eco- nomic forestry; expansion of mulberry and silk cocoon production (to provide labor-intensive cash incomes) with an increase in supporting services; reha- bilitation of tea gardens and establishment of livestock production bases combined with planting pastures; and rehabilitation end expansion of two paper mills and facilities for rabbit hair spinning, gallnut, goat and geese pro- cessing. 52. Proiect Imolementation. The Sichuan Provincial Government has over- all responsibility for implementation of the project. The project would be carried out by a Project Management Office at the provincial level (under the guidance of a Project Leading Group) and Project Offices at the prefecture and county levels. This arrangement has generally worked well through a long series of provincial agricultural development projects approved over the past four years. The project would be implemented over a period of six years with the expected completion date of December 1998. The total cost of the project is estimated at $287.6 million equivalent, with a foreign exchange cost of $85.5 million (30 percent). To take advantage of labor availability during the slack period of farming activities in the 1991/92 winter season, retroac- tive financing (up to a limit of $14 million equivalent) for upstream canal  - 16 - contracts, on-farm works, minor structures, rural roads, land improvement, afforestation work, planting materials, and trainlng would be permitted for expenditures incurred after January 1, 1992. A breakdown of project costs and the financing plan are shown in Schedule A. Amounts and methods of procure- ment and of disbursements, and the disbursement schedule are shown in Schedule B. A timetable of key project processing events and the status of Bank Group operations in China are given in Schedules C and D, respectively. Maps (IBRD Nos. 23092, 23094 and 23480) are also attached. The Staff Appraisal Report, No. 10322-CHA dated May 29, 1992, is being distributed separately. 53. Prolect Sustainabilitv. Based on careful component selection and designs, institutional and managerial capacity of the project management office, and good market prospects, the project is likely to be sustainable. Cost recovery through user charges would be adequate to cover OWM costs. In addition, the project would establish three revolving funds for agricultural inputs, soil conservation and poverty alleviation to expand the number of beneficiaries and also to ensure timely provision of necessary inputs over the long term. 54. Aareed Actions. At negotiations, the following major assurances were obtained: (a) resettlement of 132 families affected by construction of the Yaugjiaba dam would be carried out in accordance with a plan agreed with IDA; (b) before approval of financing for pulp and paper mills and a rabbit hair processing plant, an enterprise reform plan enabling each enterprise to be independently managed would be agreed with IDAs (c) three small paper mills with inadequate waste treatment facilities would be closed in accordance with timing and procedures agreed with IDA; (d) grain quotas would not be increased in any of the counties under the projectt (e) adequate irrigation water charges would be collected to meet the full annual OWH costs; and (f) at least 50 percent of farmer trainees and 20 percent of technicians to be trained under the technical assistanco program would be women. 55. Environmental Aspects. Project support for soil conservation, for- estry and pasture establishment in conjunction with livestock production would establish sustainable resource management systems and reverse some of the negative impacts associated with soil loss and inappropriate exploitation of upland resources. Pesticides to be provided under the project would be approved by IDA, and Bank Group guidelines on their storage, handling, distri- bution and use would be followed. The Sichuan Research Institute of Environ- mental Protection has carried out an environmental impact assessment (BA) of the project and prepared an SA report which was reviewed by IDA and found to be satisfactory. The project would establish an Environmental Management Plan to monitor and control waste and pollution discharge, and adequate provision for waste treatment facilities, particularly for agroprocessing, has been included in the project cost. All project activities would comply with the guidelines and regulations issued by the National Environmental Protection Agency and Sichuan Environmental Protection Bureau. 56. Benefits. The major benefits of the project would be increases in production, rural incomes and employment, and improvements in marketing and enterprise management. At full development, the project is expected to increase annual grain production by 440,000 tons, cash crops by 66,800 tons, 2.2 million i' of timber, 455,200 tons of fuelwood, 205,200 tons of mulberry  - 17 - leaves for annual production of 1,116 tons of silk cocoons, and 1.9 million head of goats, rabbits and geese. The agroprocessing component would produce 20,400 tons of paper, 254 tons of angora wool, about 2,800 tons of processed meat, 40 tons of down, 7,000 pieces of hids and 500 tons of tannic acids. Many of the project's outputs are currently in deficit nationally, and cocoon and rabbit wool production would support textile exports and generate foreign exchange. The expected beneficiaries of the project would surpass 4 million people, with significant contributions towards poverty alleviation in Sichuan*s poorest counties. The overall economic rate of return for the proj- ect is estimated to be about 26 percent. 57. Seciall Emgha_si on Alleviating Poverty and Assisting Women. The proposed project includes some of the poorest areas of the province. Of the 883,000 households to benefit directly from the project, two thirds are now living below the poverty line. Of 26 counties included in the project, 11 are nationally classified poverty counties, including 5 in Qianjiang prefecture with a large population of ethnic minorities. The project would help local farmers out of absolute poverty, with special omphasis on helping poor women in some of the poorest and most remote areas of China. While poverty is wide- spread among the general population, poverty among women is more severe. Female-headed households constitute about 10 percent of the total households in the project area. These single-income families have 144mted assets for collateral, hence less access to credit, inputs and other production means, and are generally poorer than male-headed families. The project would target these female-headed households as priority beneficiaries and would support establisbment of smallholding livestock, sericulture, and hand-knitted cloth- ing production activities. Groups of women would organize their activities and coordinate sales and marketing efforts. These activities are far less physically demanding than heavy field cultivation vork and would yield higher financial returns. Extension services would focus on training women farmers, especially in sericulture aud rabbit raising. Female extension agents would be an integral part of the regular extension staff training programs to be supported under the project would emphasize training of female extension agents and technicians, who in turn, would train more female workers. Non-governmental organizations, e.g., the All China Women's Federation, would * participate in these endeavors to organize women's groups as well as using media and female village leaders to promote women's participation in profit- able activities. Employment opportunities for women would be substantial, with additional employment of about 100,000. 58. Rsiks. The project faces no unusual technical or organizational risks. Management of project entities would be strengthened under the project and farmers in the area already have good experience and basic knowledge and would be further trained. The potential risk of fluctuating markets for silk and rabbit angora wool industries would be mitigated by provision of tachnical assistance in marketing and improved processing technology and product designs.  - 18 - 59. Recommendation. I am satisfied that the proposed Credit would com- ply with the Articles of Agreement of the Association and recommend that the Executive Directors approve the proposed Credit. Lewis T. Preston President Attachments Washington, D.C. June 15, 1992  -19 - Annex China -EOIS4IC INDICATOU TAIl.I Nid-1990 Popuastion (mitz.): 1143.3 Page 1 Of 3 1990 Per Capita SU In USS: 370.0 ---A. Share of Gras" Dustic Product .....S. Gromth Rates (2 per annua) ---- -....(from currat price data) ..... ...(from coRnstant price data).... 1965 1973 1980 1989 1990 1991 1965-73 1973.80 1980-91 199 1991 Gross Gumstic Product, m.p. 100. 100.0 100.0 100.0 100.0 100".0 8.5 5.6 9.6 5.1 6.7. Not Indirect Teame . * . * * * * . Agricutture 36.2 32.3 30.4 26.6 28.4 28.4 2.7 2.1 5.7 7.5 3.0 ierAmtry 35.0 40.7 44.7 40.7 39.5 39.5 11.7 8.? 11.1 5.7 13.0 (orf Which Namjfaotrimng) 2V.' 31.1 40.1 37.0 35.6 35.6 7.5 9.9 11.2 4.9 13.0 softvie" 26.8 27.0 24.9 32.7 32.1 32.1 21.1 6.8 11.7 2.2 1.0 IResource sanet 0.8 0.8 0.0 -0.7 3.5 3.2 .. . Experts of SUFI 4.2 4.6 6.7 13.3 17.9 20.6 2.1 4.1 12.6 12.5 13.9 Isoprts of GUFI 3.4 3.8 . 6.7 13.9 14.4 17.3 1.6 11.6 10.4 .12.8 10.7 Totat Expenditures 99.2 99.2 100.0 100.7 96.5 96.8 6.6 6.4 9.2 1.0 6.0 Total Conswption 75.2 70.2 67.8 61.9 57.6 60.8 7.3 5.3 ?.5 -1.6 11.2 Private CorasWtion 67.6 62.? 59.5 53.8 49.4 52.1 7.3 5.1 7.4 0.5 11.6 Genwrat Gwerverant 7.6 7.5 8.3 8.2 8.2 8.7 7.0 7.3 8.7 -15.1 8.? Grass COsatic Investmmnt 24.0 29.0 32.2 38.? 38.9 36.0 12.9 8.9 12.3 5.2 -1.7 fixed investmwnt . .24.0 25.9 25.1 27.0 . . Chafnge in Stock .. . .2 12. 13.8 9.0 . . Gros Daustfc Svings 24.8 29.8 32.2 38.1 42.4 39.2 12.4 8.1 12.4 16.4 -2.7 #et Factor tncome 0.0 *3.3 0.1 -0.4 -0.3 0.0 . . Ntie Current Transfer 0.0 0.0 0.2 0.1 0.1 0.1 . . Oross Natiaona Savings 24.8 26.5 32.5 37.? 42.1 39.3 13.0 8.4 12.2 16.8 .1.9 In billions of LwU's 1965 1973 1960 1969 1990 1991 (at constant 196 prices) ........ ..... .. Gross Domestic Pro&act 217 404 581 131 1377 1469 8.3 S.6 9.6 3.1 6.7 Capeity t tlapot 35 4 87 204 23 24 2.8 9.5 10.2 13.7 S.9 T.wmof Trade Adjuwtmnt -2 1 19 2 4 -14 . . Gross Domestic Income 214 405 600 1312 1381 1455 8. 62 92 53 54 Gross ational Product 217 404 581 1305 1372 1469 8.5 5.6 9.5 5.2 7.0 Gr ossNtioalt Income 214 405 600 1306 1377 1455 8.6 6.2 9.2 5.4 5.7 C. Price Indices........ (1987.100).-------- --Inflatfon Rates (M p..)---- 198 1966 1988 1989 1990 1991 1965-73 1973-80 1980-91 1990 1991 Coeuac Prfces (IS 64) 70.1 91.9, 120.7 14,0.4, 16'3.4 . . 2'.3 1'6.4' Wholesale Prices 011FS 63) .. . . . . . . . Imptfcit GOP Oef lator 76.9 95.2 111.8 122.0 128.9 133.3 -1.6 1.7 5.7 5.6 3.5 tspticit expenditure Oaftator 74.5 95.5 111.8 121.7 128.2 133.8 .1.? 1.0 5.9 5.3 4.4 0. Other Indicsatrs 1968-7 1973.8 1980.9 Population 2.4 1.6 1.4 Labor Frc 2.4 2.5 2.1 Gross Natioalt Income P.O. 3.4 4.3 7.6 Private Cwnsuptfon p.c. 4.4 2.7 5.9 tport Etesticfity: tport (G#NPS) / GOPCap) 0.2 2.2 1.1 Slargial Savings Rastes Gross National Savings 30.9 41.7 44. Gre"ossOmtic savings 35.9 VA. 44. I=O (period averaes) 0.5 5.4 4.3 1965 1973 1980 1990 1991 Sharv of Total Labo Fomce in: .. .... .... Agricut ture 80.8 77.0 68.9 60.2 Irnmtry 8.2 11.3 15.8 17.2 service 11.0 11.6 15.3 22.6 Touta 100.0 100.0 100.0 100.0 12 Jut 1992  _ 20 - Annex China - ECKO0IC IDtCtCATRS TARN Page 2 of 3 ......................... .................................................... ,.............,........ E. MNrchwndise lipxrts ......V.lvue Index (1987u100}w) .... -Valwu at current prices (mil. USS).*-. 1980 1987 1988 1989 1990 1991 1960 19 1998 1989 1990 1991 X.FCO 34.6 100.0 111.? 124.3 154.5 184.5 3138 5037 6Z00 6544 7094 7906 X.FU8 43.0 100.0 117.9 107.0 104.7 121.6 4273 4544 3950 4321 5225 4821 ~~~~~~~.. .. ... .. .. * ..*.* . .. ... .. Marufactures 42.6 100.0 117.8 134.2 156.3 185.1 9051 26M04 33110 37460 46206 55698 Residual 29.1 100.0 123.2 121.1 106.7 112.2 1726 3650 4257 4212 3537 3486 Tatsl Mxperts FOB 40.4 100.0 117.5 128.6 14S.S 171.0 18188 39637 47518 52537 62n3 71910 f. Mrchandise tlprt Food 58.3 100.0 124.4 165.0 160.7 143.1 32t1 3055 4191 5269 4474 3718 Fuet and ener 17.2 100.0 198.0 344.3 214.9 449.4 203 539 787 16S0 12?2 2114 theer consmer sads 40.S 100.0 97.1 103.7 109.0 123.3 544 1743 1757 1866 2051 2S06 Other fnterned. goad 82.4 100.0 134.4 135.3 101.3 118.5 10639 16769 2n39 23415 183 23189 Capitat goods 32.9 100;0 114.8 123.7 119.5 131.0 5353 21110 25150 26940 27225 32264 Total sports CJF 54.0 100.0 123.4 133.1 116.1 130.7 19950 43216 55275 59140 53350 63791 C. Mrchandise Ten, of Trada 1980 1987 198 1989 1990 199 ........."...................................... .... ..... .... ..... .... ........ ..... ..... Nerdh. Expwrt Price Indx 114.2 100.0 102.5 103.6 108.1 106.7 March. Isports Price tndex 85.5 100.0 103.7 102.8 106.3 113.0 March. Tem of Trade 133.6 100.0 98.9 100.? 101.7 94.4 - M---18 .lti11m (at current prioes)--... V. Blance of Pamnts 1980 1987 1988 1989 1990 1991 _...... .... ............... .... ..... .... ..... .... ... ... Exports of Goods a lFS 20085 43823 S1753 5687 66219 73734 Morchandise (FOS) 18188 3437 47518 52537 62063 71911 mon-factor sevices 1897 4386 4235 3750 41S 3823 Iwts of Goods & lFS 19950 43216 5S27S 59140 53350 63791 Merchandise (FOS) 18294 39629 50687 54231 48922 S8496 Mon-factor services 1656 3587 4588 4909 4428 S295 Resource Salteee 135 607 .3522 -283 12869 11943 mlt Factor Incoe 195 -790 .699 -1845 .1129 -31 (interest per MRS) 318 1815 2195 3203 3146 Net Current Transtf 640 249 416 238 195 325 (worker rinittames) 640 166 129 76 108 179 Curr A/C al beore Off. Grants 970 t6 -3805 -460 11935 12237 Met Officala Tranfwers -70 -25 3 143 65 134 Cur A/C Ba aftw Off. Grants 900 41 -3802 4317 12000 12371 Long Tem Capital Inflow 1830 S81S M3 3212 3900 2900 Oirect Inestt 57 1669 2344 2613 260 3340 Net Lt Loans (MOS data) 1927 6131 6781 6023 6249 4791 other LT inflows (Net) -153 -1985 -2072 -5424 -S009 -3548 Total Other tt., (Not) -2063 -1630 -1588 625 -4330 -1172 Met ortetg7 Caital 0 2145 585 -1899 -141 -3000 Capital slou I.E.J. -3n4 -2= 3 1079 1229 -976 264 Errors and 00cssiw 1671 -1450 *1094 4S -3213 -856 Chaoges in Mot Reserves -667 -4226 -1663 1730 -11570 -14099 Met Credit frm IMF 0 -81 -83 -79 -490 -409 Other Reserv hanoses -667 -4145 -1580 1809 -11080 -13690 As sharo of GIP: Resource 8l4et 0.0 0.2 -0.9 -0.7 3.5 3.2 tnterest Peymwnt 0.1 0.6 0.6 0.8 0.8 .. Current Acouat *taanco 0.3 0.0 -1.0 -1.1 3.2 3.3 1emnrandm item: Reserves owl. Gold (afl. USS) 2S45 16305 18541 17960 29586 43674 Reserves inct. Gotd (ot. USS) 109 22453 237 23053 34476 47300 Officiat K-Rate (LCW/US) 1.50 3.7M 3.72 3.77 4.78 5.32 Index Real off. X-R Ue 1980 100.00 39.96 43.35' 50.39 37.14 MP (millinsw,current US) 298123 304409 3M20 424577 370894 367541 ............................................................... .......................... ...... ................. ............................................ _,,.. ,, 1Z Jun IM  - 21 - Auuex Chine ECOiOWtC INDICATORS TABLES ............. I................................. Page 3 of 3 ... .------Share of CDP (W) ............. ......... ---th Rates (X)-......... I. Govesnsent FPinee 19e0 1987 1988 1989 1990 1991 1960-88 1928 19B9 1990 1991 ..................... .... ..... .... ..... .... .... . .... .... .... ..... .... ......... ..... ..... ..... ..... .. Current Refeipts 29.5 22.7 20.0 20.4 19.8 18.6 11.2 8.9 16.4 7.8 3.7 Current Expenditures 22.2 18.3 16.9 18.1 17.3 16.9 11.9 14.9 21.5 6.3 7.6 Current Budget 0alan.e 7.3 4.5 3.0 2.4 2.5 1.8 7.9 -15.7 -1t.9 19.1 -22.9 Capital Ree1pte 0.0 0.0 0.0 0.0 0.0 0.0 cpUitot Expenditure 10.6 6.7 S.4 4.7 4.6 4.2 10.4 o:i -o:i 7 9 1.8 ODeralt Deficit *3.3 -2.2 -2.4 -2.4 2.1 -2.6 .. .. .. Offfeal CopItal.Grants 0.0 0.0 0.0 0.0 0.0 0.0 .. .. External Serroing (not) O.S 0.6 0.8 0.7 0.? 0.5 .. 69.1 *1.7 15.9 -18.3 Do.. Nonw-Bnk Sorrofing 0.0 o.a 0.7 2.1 0.4 1.5 .. 11.? 220.0 -81.3 27.0 Domestic lank Pinaneing 2.8 0.7 0.8 -0.5 1.0 0.6 .. 36.9 -165.2 332.0 .29.3 ......Net Disbursaments tUSS mitt.) ..... D -ebt Outatandirg & Disbursed CUSS mill.)- J. External pftl rtws* ............ --............................. ...................... ..C. ... Oebt & Debt Surden Ratfos 1980 19g7 1988 1989 1990 1991 1980 1987 1988 1989 1990 1991 Publie & Publilty Guaranteed LT 1927 6131 6781 6023 6249 .. 4504 25927 32588 37032 45319 Officiat Creditors 195 730 13SS 2255 1705 . 447 9495 1053& 1201S 14466 multi tateral C 622 1083 1086 926 .. 0 2852 3753 4761 6076 of whichtRD 0 209 514 542 376 .. 0 1427 1832 2330 2865 oebihich IDA 0 399 557 486 495 .. 0 1330 1819 2275 2981 Silateral 195 109 272 1170 780 .. 447 6642 6780 7254 8390 Private Creditors 1732 5401 5426 3768 4544 .. 4057 16432 22054 25017 30853 Supptiefs 376 -341 453 747 932 .. 1036 1618 1996 2600 3818 Financiat markets 47 5170 4475 1549 2333 .. 1564 10s52 15560 16631 19855 Privtet on-Guaranteed 0 0 0 0 0 .. 0 0 0 0 0 Total Lon Term Debt 1927 6131 6781 6023 6249 .. 4504 25927 325e8 37032 45319 INF Credit 0 -81 -83 -79 -490 .. 0 1153 1013 908 469 Net Short-Term Capital 0 2145 585 -1899 -141 .. 0 8221 8806 6907 6766 Total itel. IMP & Not ST 1927 8195 7283 4045 5618 .. 4504 35303 42406 44847 52555 Bank and IDA ratios: 1980 1987 1988 1989 1990 1991 .. ... .. ... .Notes: Share of Total LT DOD 1. ISRD as X of Total 0.00 5.51 5.62 6.29 6.32 ., Data on Econamic Indicators tables 2. IDA as S of Total 0.00 5.13 5.58 6.14 6.58 .. should follow the definitions and 3. 183D0IA as X of Total 0.00 10.63 11.20 12.43 12.90 .. the coneepts of the Standard Tables and Standard Attachments. The indicators Share of Total LT DSR should Incltude data through the most 1. IBRD as 2 of Total 0.00 6.85 4.16 4.54 7.04 .. recently completed calendar year (or 2. toA as X of total 0.00 0.40 0.38 0.28 0.31 .. fiscal year In the case of fiscal year 3. IBRODIOA as X of Total 0.00 7.24 4.54 4.82 7.35 .. countries). Staff estimates my be used if final or preliminary actuals are not DM0 to Experts Ratios: yet availlabe. the use of estimates and 1. Long-Term Debt/Exports 21.21 57.59 61.04 6".15 66.31 .. prelimirry figures should be indicated 2. IMP Credit/Exports 0.00 2.57 1.90 1.57 0.69 .. by: 3. Short-Term Debt/Experts 0.00 18.26 16.49 11.97 9.90 4. LT+IMF#ST/Exports 21.21 78.42 79.43 77.69 76.89 .. *a estimated data p a preliminary data DOD to GDP Ratios: 1. Long-Term Dbt/UODP 1.51 8.52 8.64 8.72 12.22 2. IPF Credit/COP 0.00 0.38 0.27 0.21 0.13 3. Short-Term DobtDP 0.00 2.70 2.33 1.63 1.82 4. LT.INF+ST/CDP 1.51 11.60 11.24 10.56 14.17 Oebt Service/Exports: 1. Pubfic & Guaranteed LT 4.38 6.76 7.42 8.50 8.64 2. Private Non-Guaranteed LT 0.00 0.00 0.00 0.00 0.00 3. Total LT Debt Service 4.38 6.76 7.42 8.50 8.64 4. IMP Repurchases Srv Chg 0.00 0.29 0.25 0.25 0.81 S. Interest only on ST Debt 0.00 1.42 1.00 1.09 0.80 6. Total CLT+IMNPST Int.) 4.38 8.47 8.67 9.85 10.25 ...................................................................................................................... 12 Jun 1992  - 22 - Schedule A CHINA SICgHAN AGRICULTVRAL DEVELOPMENT PROJECT Estimated Costs and Financina Plan ($ million) Local Foreign Total Estimated Pro1ec; Cost LA Irrigation Shengzhong 42.5 14.3 56.9 Wudu 68.9 25.3 94.2 Yangjiaba 3.8 1.0 4.8 Ag. Support Services 4.1 6.6 10.7 Soil Conservation Demonstration Area 3.9 1.0 4.9 Forestry 8.6 1.8 10.4 Income Generation Sericulture 11.6 3.7 15.3 Tea Rehabilitation 0.7 0.3 1.0 Livestock 4.4 1.3 5.7 Agroprocessing 17.6 19.9 37.5 Total Base Costs 166.3 75.2 241.5 Physical Contingencies 12.2 6.1 18.3 Price Contingencies 23.7 4.1 27.8 Total Proiect Costs 202.1 85.5 287.6 Financint Plan Central Government 17.0 0.0 17.0 Provincial/Prefecture Governments 45.5 0.0 45.5 County Governments 19.0 0.0 19.0 Local Banks 9.0 0.0 9.0 Special Poverty Alleviation Funds 10.0 0.0 10.0 Enterprises and Farmers 40.1 0.0 40.1 IDA 61.5 85.5 147.0 Total 202.1 85.5 287.6 La The project is exempt from taxes and duties (excluding construction tax).  - 23 - Schedule B Page 1 SIMCUAN AGRICULTRAL DEVELOPMSENT PROJECT Procurement ($ million) Progurement Method Total Project items ICB LCB Other NIF Cost Land - - - 12.8 12.8 (0.0) (0.0) Civil Works 39.4 82.8 52.2 - 174.4 (19.3) (40.6) (15.3) (75.2) Materials 12.7 1.6 10.1 - 24.4 (12.7) (1.6) (8.1) (22.4) Machinery & Equipment 25.0 7.0 11.8 - 43.7 (25.0) (6.8) (9.4) (41.2) Vehicles 4.5 _- - 4.5 (4.5) (4.5) Training - 3.1 - 3.1 (3.1) (3.1) Technical Assistance - - 0.3 _ 0.3 (0.3) (0.3) Research - - 0.4 - 0.4 (0.3) (0.3) Design & Engineering - - - 8.0 8.0 Management (0.0) (0.0) Farm Labor - - - 9.5 9.5 (0.0) (0.0) Working Capital - - - 5.6 5.6 (0.0) (0.0) Construction Tax - - - 1.0 1.0 (0.0) (0.0) Total 81.6 91.3 77.9 36.8 287.6 161.S) (49.0) (36.5) (0.0) (147.0) Notes Figures in parentheses indicate amounts financed by IDA. NIP - Not IDA-funded.  - 24 - Schedule B Page 2 Disbursements ($ million) I of Expenditures Cateoorv Amount of Credit to be financed (1) Works 75.2 301 of total expenditures for force account, 501 of total expenditures for other works (2) Goods Materials 22.4 ) 1001 of foreign expenditures, X X100 of local expenditures (ex- Machinery & Equipment 41.2 ) factory cost) and 751 of local I expenditures for other items Vehicles 4.5 ) procured locally (3) Training and Technical Assistance 3.4 lOO0 (4) Research 0.3 1OO1 Total 147.0 Estimated IDA Disbursements IDA Fiscal Year 1993 La 1994 1995 i26 1997 1998 1999 Annual 20.0 32.0 36.0 26.0 18.0 12.0 3.0 Cumulative 20.0 52.0 88.0 114.0 132.0 144.0 147.0 /a Includes $14 million retroactive financing for expenditures incurred after January 1, 1992.  - 25 - Schedule C CHINA SICHUAN AGRICULTURAL DEVELOPMENT PROJECT Timetable of Ren Proiect Processint Events (a) Time taken to prepares 16 months (b) Prepared by: Government with FAO/CP and IDA assistance (c) First IDA mission: June 1990 (d) Appraisal mission departure: November 1991 (0) Negotiations April 20-24, 1992 (f) Planned Date of Effectiveness: October 1992 (g) List of relevant PCRs and PPARs: PAPR Credit/Loan No.L Proiect PCR Date Relort No. Cr 1261-CHA North China Plain 03/03/88 7736 Cr 1347|Ln 2261-CHA Heilongjiang Land Reclamation 06/28/89 Cr 1462-CHA Rural Credit 06/11/90 Cr 1932/Ln 2967-CHA Rural Sector Adjustment Loan 06/19/91 Cr 1577-CHA Seeds 06/21/91 The project was prepared by the following: The appraisal team included B. Kim (mission leader), J. Stomp (agriculturalist), and W. Price (irrigation engi- neer), J. Smyle (soil conservation, consultant), C. Cronberg (agroprocessing, consultant), G. Hong (project analysis, consultant). Others involved in the preparation and preappraisal were B. Albinson (irrigation engineer), J. Post (environmentalist), R. Dayal (WID specialist), P. Gilchrist (livestock, consultant), H. Lea (sericulture, consultant), 0. Knowles (soil conservation, consultant), M. Bi (project analysis, consultant) and A. Hameed (FAO/CP).  - 26 - Schedule D Page 1 STATUS OF BANK GROUP OPERATIONS IN THE PEOPLE'S REPUBLIC OF CHINA A. STATEMENT OF BANK LOANS AND IDA CREDITS (As of March 31, 1992) Loan/ Amount (USS million) Credit ear- (net of cancellatlons) Number FY rower Purpose Bank IDA Undisb. (a) Fourteen Loans and nineteen credits have been fulty disbursed. 1320.94 1013.9 - Of which SECAL: 2967/1932 88 PRC Rural Sector Adj. 200.0 100.0 .... . ........ 1411 84 PRC Polytechnic/TV University - 85.0 4.6 2382 84 PRC Lubuge Hydroelectric 141.4 - 1.0 1472 84 PRC Rural Heatth & Medical Educ. - 85.0 0.1 2444/1500 84 PRC Agricultural Education II 45.3 (23.5)tb) 2.5 1516 85 PRC Agricultural Research II 25.0 1.0 1551 85 PRC University Development II 145.0 10.6 62493 85 PRC Power II 117.0 - 7.3 2501 85 PRC Changcun (Luan) Coal Mining 79.5 38.6 1578 85 PRC Rural Water Supply - 80.0 0.0 2540 85 PRC Raitway II 220.0 - 59.2 1605 85 PRC Forestry Development 47.3 7.0 2579/1606 85 PRC PiShiHang-Chaohu Area Dev. 17.0 (75.0)(b) 0.1 2580 85 PRC Weiyuan Gas Field Technical 25.0 - 0.6 Assistance 1664 86 PRC Technical Cooperation Credit II - 20.0 14.6 1671 86 PRC Provincial Universities - 120.0 S.1 2678/1680 86 PRC Third Railway 160.0 70.0 97.3 2689 86 PRC Tianjin Port 130.0 - 53.1 1689 86 PRC Freshwater Fisheries - 60.0 1.7 2706 86 PRC 8eilungang Thermal Power 225.0 - 29.2 2707 86 PRC Yantan Hydroelectric S2.0 - 14.5 2723/1713 86 PRC Rural Health & Preventive Med. 15.0 65.0 37.1 1733 87 PRC Red Soils - 40.0 0.8 2775 87 PRC Shuikou Hydroelectric 140.0 33.5 2783/1763 87 PRC Industrial Credit IV (CIB IV) 250.0 50.0 76.4 2784 87 PRC Shanghai Machine Tools 100.0 - 20.0 1764 87 PRC XinJiang Agricultural Dev. 70.0 18.7 2794/1779 87 PRC Shanghai Sewerage 45.0 100.0 87.3 2811/1792 87 PRC Beiling-Tianjin-Tanggu Expresway 25.0 125.0 43.0 2812/1793 87 PRC Gansu Provincial Dev. 20.0 150.5 81.1 1835 87 PRC Planning Support 8 Special Studies - 20.7 12.2 2838 87 PRC FortiLizer Rationalization 97.4 - 15.9 2852 87 PRC Wujing Thermal Power 190.0 - 60.4 1871 88 PRC Rural Credit III - 170.0 11.2 2877/1845 88 PRC Huangpu Port 63.0 25.0 59.2 2907/1875 88 PRC Dalian Port 71.0 25.0 32.9 188S 88 PRC Northern Irrigation - 103.0 44.1 2924/1887 88 PRC . Coastal Lands Dev. 40.0 (60.0)(b) 23.0 1908 88 PRC Teacher Training * 50.0 8.0 2943 88 PRC Pharmaceuticals 127.0 - 20.3 2951/1917 Ss PRC Sichuan Highway 75.0 50.0 84.4 2952 88 PRC Shaanxi Highway 50.0 13.5 1918 88 PRC Daxing An Ling Forestry - 56.2 11.7 2955 88 PRC Beilungang II 165.0 37.6 2958 88 PRC Phosphate Dev. 62.7 - 53.0 2968 88 PRC Railway IV 200.0 - 97.6 1984 89 PRC Jiangxi Provincial Highway - 61.0 37.4 1997 89 PRC Shaanxi Agricultural Dev. 106.0 77.9 2006 89 PRC Textbook Development - 57.0 4.0 2009 89 PRC Integrated Reg. Health 52.0 40.0 3006 89 PRC Ningbo & Shanghai Ports 76.4 - 28.3  - 27 - Schedule D Page 2 LoanW Amoumt (US$ million) Credit 3or- (net of cancellations) Number fY rower Purpose Dank IA Undiab. (a) 3007 89 PRC Xiamen Port 36.0 ERR 3022 89 PRC Tianjin Light Industry 154.0 - 114.1 30602014 89 PRC Inner Mongolia Railway 70.0 80.0 100.4 2017 89 PRC Shandong Agriculture Dev. 109.0 48.2 3066 89 PRC Hubef Phosphate 137.0 * 130.9 3073/2025 89 PRC Shandong Prov. Highway 60.0 SO.0 76.7 3075 89 PRC Fifth Industrial Credit 300.0 190.5 2097 90 PRC Jiangxi Agric. Dev. - 60.0 45.9 2114 90 PRC Vocational & Tech. Educ. - 50.0 37.3 2145 90 PRC Nationat Afforestation - 300.0 237.8 2159 90 PRC Hebef Agricultural Dev. - 150.0 111.5 2172 91 PRC Nid-Yangtze Agricultural Oev. - 64.0 49.0 3265/2182 91 PRC Rural Credit tV 75.0 200.0 168.3 3274/2186 91 PRC Rural Induct Tech (SPARK) 50.0 64.3 108.4 3286/2201 91 PRC Mediu-rSized Cities Dev. 79.4 89.0 147.6 3288 91 PRC Shanghai Industrial Dev. 150.0 - 148.5 2210 91 PRC Key Studies Development - 131.2 116.7 2219 91 PRC Liaoning Urban Infrastructure - 77.8 54.3 3316/2226 91 PRC Jiangsu Provi. Transport 100.0 53.6 128.8 2242 91 PRC Henan Agricul. Dev. - 110.0 105.0 3337/2256 91 PRC Irrig. Agricul. Intensif. 147.1 187.9 291.5 3387 92 PAC Ertan Hydroelectric 380.0 256.7 2294 92 PRC Tarim Basin 125.0 121.2 2296 92 PRC Shanghai Metro Transport - 60.0 56.8 3406 92 PRC Railways v 330.0 * 330.0 3412/2305 92 PRC Daguangba Multipurpose 30.0 37.0 64.4 2307 92 PRC Guandong ADP (c) - 162.0 166.2 3415/2312 92 PRC Befijing Environment 45.0 80.0 119.5 2317 92 PRC Infectious and Endemic Disease Cont.Cc) - 129.6 131.0 3433 92 PRC Yanshi Thermal Power (c) 180.0 180.0 2336 92 PRC Rural Water Supply and Sanitation (c) - 110.0 107.7 2339 92 PRC Educ. Development in Poor Provs. (c) - 130.0 127.3 3443 92 PRC Regional Cement tndustry (c) 82.7 * 82.7 ...._............. .................. Total 6751.8 5738.0 5702.1 of which has been repaid 447.3 0.6 Total now held by Bank and IDA 6304.6 5737.4 Amount sold: Of which repaid - - Total Undisbursed 3149.6 2552.4 5702.1 (a) As credits are denominated in SORs (since IDA Replenishment VI), undisbursed SDR credit balances are converted to dollars at the current exchange rate between the dollar and the SDR. In some cases, therefore, the undisbursed balance indicates a dollar amount greater than the original principal credit amount expressed in dotlars. (b) Cr dit fully disbursed. Cc) not yet effective.  - 28 - Schedule D Page 3 B. STATEMENT OF IFC INVESTMENTS (As of March 314 1992) tnvest- Type of Loan Equity Total ment No. FY Borrower Business ------ (USS Miltion) ------ 813/2178 85/91 Guangzhou and Peugeot Automobile 15.0 4.5 19.5 974 87 China Investment Co. Investment 3.0 0.0 3.0 1020 87 Shen2hen China Sicycle 5.0 5.0 Bicycles Co. Ltd. Manufacture 1066 88 Crown Electronics Electronics 15.0 - 15.0 1119 89 Shenzben Chronar Solar Solar Ca) 2.0 1.0 3.0 Energy Energy Total Gross Commitments 40.0 5.5 45.5 Less cancellations, terminations 2.0 - 2.0 repayment and sales Total Comuitments now Held by IFC 38.0 5.5 43.5 Total Undisbursed 0.0 - 0.0 (a) Loan subsequently cancelled.  QINGHAI C, - U GiU i F 0 66 S/Y / Hnga Cir Wcter 0 /Zhoohoa S 30I M.- ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~j~oo Mo P,j0/ 130MW~x 4~ 1.7Mn'1(..GZIJ 322 YUNNAN 1 KOVINC OUNDAOS v<<~ ~~ed w8; 1066' d X Y 43gBc l : 10m 5 0m Dl M0u692^ < 11 i Y a ,ggwi , 901,617 , 'o -l 20DM ~~ ~'3 Re\ _se;aver,,r gOX ' . 7 ;a 4 .@ '31' ~ ~ ~ 1 SICHUAN AGRICULTURAL DEVELOPMENT PROJECT v )>{t IRRIATIO CWOMPONN4S\ A It "9MD~~~~~~1 ~ \8880 SMAO OPS aM -P 08 20. 1 0 0 40 1 0080,0,1N,Z I~I OlI p09 08 II 980080 001.01o 0,_ 8.od8 11(' \ e oll ~ JUP, \ , AFlL, I C H I Na^D A ' ~ \ SICUA AGICUTUA DEVEL4OPMN PROJECV\ il{;R ~~~IRGTION COPOENT<\1z c_ d~~~ mofidms4 w m s11_ol zddf1 Oo 1 d u _d d Ib sb o Ib 2v JI ~~~~~~~KHMfi doVdaNA l * w Ih oUSo .mvi 6' H=sis im ez _ ee-l-- URRMY CAN >+1  \G.h 2 S.PAANXI / J%r_ ;S R t ~~~~~~~TYPICAL TRUNK DITCH, FARM DITCH Zip - tY tl. ecoiwwV.,c.dw ~ ~ ~~~ ~~ ~~~~~~~~~~~~~~~~~~~~~~.R.b CC,ata Dl. fla,*AC*. i ~~~~~T 0.101W. Jt *00 -3C- h - 000 900 TEF a~bo,M ) '. ._ 81 k~~~~~~~~~~~~~~~~~~ H I N '& 9' / \ \t ~ ~ ~ ~ ~ ~~YPCA TRUNK DITCH,FR DIC < &7 9-A ? a . .~~~AN SUB FARM DITCH INEGATO ) e ) \~~~~~~~~~~ SUB F~~~OM "AREA DTC A~~~~~~~~~~~~~~~~~~~~~~~~r= TR>1 4 FUN DnTCH t~~~~~~~~~~~~~~~~~~~~~~~~~~~~--- S 1 )B FARM DffCHE and"h7~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1 I S\ ~~~~~_ X m ~~~~~~~~~~~~~~~~~~~~~~~SUEt FARM DITCHi FARM DITC W~~~~~~~~~~~~~~~~~~~~~~~~~~~~~u FAR DITC I << /  IBRD 23480 MONGOLIA */ g -% ') A 106 ~CHINA IO SICHUAN AGRICULTURAL DEVELOPMENT PROJECT \ t > ,, wr.oW >-: PROJEc AREAs JJXlllS / C S,rA