Announcement of Tianjin Overhauls Five Industrial Sub-Sectors on March 17, 1993

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. *Telephone: (202) 477-1234 IBRD News Release No. 93/62EAP Contact: Erin Burns (202)458-2210 TIANJIN OVERHAULS FIVE INDUSTRIAL SUB-SECTORS Washington, D.C., March 17, 1993 --- Industrial development in Tianjin, China, will receive a boost from a program to restructure five industrial sub-sectors. The program is part of the Chinese Government's overall effort to improve industrial efficiency and competitiveness through economic and enterprise reform. A World Bank loan of $150 million will help finance the program in Tianjin. With a population of about 9 million people, Tianjin is China's third largest city after Shanghai and Beijing. Its location on two main waterways and good railway connections have made it a large economic center serving Northern China. It has a large and diversified industrial base, but the sector is in need of reform and modernization. The Tianjin industrial development project will promote policy and enterprise reform and modernization and restructuring of the machine tools, construction equipment, electronic components, automotive parts, and electric motors sub- sectors. The Bank loan is composed of two components. $134.5 million will be on-lent to enterprises in the five sub-sectors to restructure and modernize their operations. The China Investment Bank, the Industrial and Commercial Bank of China and the Bank of Communication will act as financial intermediaries and will also appraise sub-project proposals and supervise progress after approval. A technical assistance component of $15.5 million will be used to strengthen institutional infrastructure in the five sub-sectors, as well as promote human resource development and redeployment. To ensure that measures are taken to protect the environment, the Tianjin Environment Protection Bureau will approve renovation or expansion plans of participating enterprises. These plans will then be reviewed and finally approved by the World Bank. This is the second Bank loan extended for industrial restructuring in Tianjin. A loan of $154 million was approved in 1989 to help restructure the textile, paper and packaging sub-sectors. In 1992, the International Development Association (IDA) approved a credit of $100 to help relieve infrastructural bottlenecks in Tianjin. This included the management of solid wastes and pollution control in industrial enterprises. IDA is the Bank's affiliate for concessionary lending. The total cost of the project is estimated at $222 million. The participating financial institutions, enterprises and the Tianjin Municipal Government are providing the remaining $72 million in project financing. The loan is extended for 20 years, with five years of grace, at the Bank's standard variable interest rate, currently 7.43Z. NOTE: Money figures are expressed in U.S. dollar equivalent.