China - Fiscal Technical Assistance Project

Document of The World Bank FOR OFFICL USE ONLY L ut . 7 O S- Ki//c,7- Report No. P-6552-CHA HEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND TEIE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AMOUNT EQUIVALENT TO $25. 0 MILLION AND A PROPOSED CREDIT OF SDR 16.8 MILLION TO THE PEOPLE' S 'REPUBLIC OF CHINA FOR A FISCAL TECHNICAL ASSISTANCE PROJECT APRIL 3, 1995 This document has a restricted distribution and mav be used bv recipients onlv in the performance of their official duties- Its contents ma. not otherwise be disclosed without World Bank authorization.  CURREiNCY EQUIVALENTS (as of February 1995) Currency Unit = Yuan (Y) $1.00 = Y 8.50 Y 1.00 = $0.12 WEIGHTS AND MEASURES Metric System ABIBREVIATIONS AND ACRONYMS ADB - Asian Development Bank Cs - Consultancies Err - Enterprise Income Tax GNP - Gross National Product IBRD - International Bank for Reconstruction and Development IDA - International Development Association IMF - Intemational Monetary Fund LTS - Local Tax Service MOP - Ministry of Finance NTS - National Tax Service PBC - People's Bank of China PCT - Project Coordination Team PIT - Personal Income Tax SAT - State Administration of Taxation SE - State-Owned Enterprise SRC - Systems Reform Commission TA - Technical Assistance TOR - Terms of Reference UNDP - United Nations Development Program VAT - Value Added Tax FISCAL YEAR January 1 - December 31  FOR OFFICIAL USE ONLY CHINA FISCAL TECHNCAL ASSISTANCE PROJECT LOAN/CR.EDrr AND PRoJEc SumARY Borrower: People's Republic of China Beneficiaries: Ministry of Finance, State Administration of Taxation Poverty: Not Applicable Amoumt: Loan: $25.0 million equivalent Credit: SDR 16.8 millior. ($25.0 million equivalent) Ternms: For the Bank loan: Twenty years, incluiding a five-year grace period, at the Bank's standard variable interest rate. For the IDA credit: IDA standard terms with 35 years' maturty CommI Fee: For the Bank loan: 0.75 percent on undisbursed loan balances, beginning 60 days aftei signing, less any waiver. For the IDA credit: 0.50 percent on undisbursed credit balances, beginning 60 days after signing, less any waiver. Hnancing Plan: See Schedule A. Economic Rate of Return: Not Applicable Technical Annex: No. P-6552-CHA This document has a restriced distinbution and may be used by recipients only in the performance of their |official duties. Its contents may not otherwise be disclosed without Word Bank authorization.  MIIEMORANDUM AND RECOMMENDATION OF THIE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELP1MENT AND TJHE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN AND CREDIT TO THE PEOPLE'S REPUBLIC OF CHINA FOR A FISCAL TECBNICAL ASSISTANCE PROJECT 1. I submit for your approval the follownng memorandum and recommendation on a proposed loan for the eauivalent of $25 million and an IDA credit for SDR 16.8 million, the equivalent of $25 million, to the People's Republic of China to help finance technical assistance to improve tax administration and fiscal management in China. The loan would be at the Bank's standard variable interest rate, with a maturity of 20 years, ncluding 5 years of grace. The credit would be on standard IDA terms, with a maturity of 35 years. The proceeds of the loan/credit would be made available as grant contibutions to State Admtation of Taxation. 2. Background. China's fiscal system has been under strain since the reforms began in 1978. The reforms initiated a major shift of the tax base away from the sectors traditionally taed by the revenue system, and the share of government revenues in GNP fell from over 34 percent in 1978 to less fian 16 percent in 1993. The tax strucure was complex, with 33 taxes, a multitude of rates in many taxes, and enterprise income taxes (ElTs) that vaned by ownership and carried high margin rates. Competition among enterprises was further distorted by tax contracting between govemment and sat-owned enterprses (SEs), which also undermined buoyancy of tax revenues. Central government revenues were increasingly eroded by the intergovernmental fiscal contracts that left an increasng share of revenues to local governments, and by tax exemptions granted by local governments that controlled the tax administration. The effectiveness of the tax administation has been restricted by inadequate procedures, organizational arrangements, and data processing systems. The budgetary system has not kept pace with the reforms in the rest of the economy. The budget coverage, classification and procedures insufficienty served policy analysis, intnal management, and control over budgetary outlays. 3. In 1993, China embarked on a major reform of its fiscal institutions and practices in order to adapt them to a market-based economy. These reforms were endorsed in the 'Decisions of the Third Plenary Session of the Fourteenth Central Committee of the Communist Party of Chinaw in November 1993. The reforms can broadly be divided into four parts: (a) a major overhaul of the tax system, including a broadening and simplificaton of the value added tax (VAI) and unification of domestic ETs; (b) the creation of separate tax administrations for centaml and shared taxes (National Tax Service, NTS) and local taxes (the Local Tax Serice, LS); (c) a restructuring of intergovernmental fiscal relations, designed to gradually increase the centmal govemment's  -2- revenue share; and (d) the passng of a Budget Law, which codifies procedures and responsibilities in the budget process. 4. The Government has requested the Bank Group and IMF to assist in implementing the fiscal refonns. In Tax Administration, the implementation of the NTS requires the development of new procedures, new organizational arrangements, and modem coniputer systems. The tax administration reforms are led by the central State Administration of Taxation (SAT), a ministenal-level agency independent of the Ministry of Finance (MOF). SAT's strategy-developed with IMF assistanc-cals for the introduction of reforns on a pilot basis before a phased nationwide implementation over a period of five to seven years. in Tax Policy, the reforms introduced in 1993 require refinement and expansion in the medium term, and, consequently, the Govenment intends to develop its capacity for tax policy analysis. The State Council has assigned prmary responsibility for tax policy to MOF. The authonties are considering increased autonomy for subnational governments in setting tax rates. They therefore intend to build tax policy analysis capacty at the provincial level. in Intergovernmental Fiscal Relations, the Govenmnent's pTiority is to design and implement a grants scheme that redistrbutes the expected increasing surplus of central revenues over expenditures to the provinces. The authonties are considering a grants scheme that would take both revenue capacity and expenditure needs into account, and would be implemented on a pilot basis in 1997. The Government's priority in ie area of Budget System and Procedures is to implement the Budget Law, which encompasses reforms m the treasury function, the budget accounting system, and budget preparation and implementation methods. 5. Project Objectives. The prcject would support the implementation of recent fiscal and tax refonns and the preparation of future reforms by: (a) developing and implementing a new national tax administraton; (b) improving capacity for tax policy analysis; (c) develoiping and implementing a central-provincial grants scheme; and (d) improving budgetary processes and practices. The project would increase the productivity of the tadmistration, contribute to improvements in the management of public resources, and promote more equitable distribution of fiscal resources among provinces. 6. Project Description. The project would finance consultancies (CS), taining, studies, and equipment at central and provincial levels. (The figures in parentheses are the base costs without contingencies.) 7. Tax Admiation ($76.3 million equivalent). This component would support the development of a national tax administration capable of implementing current and futue tax reforms. The project would develop nevw administrative procedures, organizational angements, and information systems in four pilot cities (Phase 1), which, after evaluation, would be expanded to 18 cities (Phase D;) on the basis of a roll-out plan developed under the project The SAT will develop and implement the information system pnmarily in-house, with consultant's support for systems design. Data processing would be concentrated at the district and oDunty levels, but city and national level systems are also envisioned. The project would support (a) CS for tax aminion procedures and  - 3 - information systems development; (b) training in systems development, and in crucial administrative and managerial functions; and (c) equipment and software for the information system in 18 cities, at the national office, and in a training center. 8. Tax Policy Analysis ($4.8 million equivalent). This component would improve the tax policy analysis capacity of the Govemment. The project would support the gradual transfer of the tax policy function fiom SAT to MOP, and create tax policy analysis capacity at the provincial level. The project would finance: (a) the design of approriate databases for tax policy analysis; (b) computer equipment for processing the databases; (c) training for government officials in tax policy analysis at the central and the provincial level; and (d) studies to prepare future tax reforms. Among others, the studies will address: (i) unification of foreign and domestic EITs; (ii) broadening of the tax base for the personal income tax (PIT); (iii) tax assignment and local tax autonomy; and (Wv) the scope for environmental and resource taxes in China. The studies are included in the work program for the ninth five-year plan (1996-2000). 9. Intergovemental iscal Relations ($2.9 million equivalent). This component would support the development and implementation of an efficient and equitable central-provncial grants scheme. The project would develop a detailed grants scheme design, and administrative procedures and an infonnation system for its implementation. The grants scheme would be tested in six pilot provinces. The project would provide: (a) CS for the detailed design of the center-provincial grants scheme, and the development of an information system; (3) training for the implementation of the grants scheme; and gc) equipment for the information system. 10. Budget System ($4.3 million equivalent). This component would increase the MOF's instittional capacity to admiister the Budget aw, and prepare a reform strategy for the budget system. The component would improve budget accounting and audit; trsury management; and budget analysis and implementation. The component would finance: (a) studies for the assessment of the current budget system; (b) study tours and workshops to compare the Chinese budget system with intenational best practice; (c) CS for improving budgetary procedures and practices; and (d) CS, training and computer equipment for improving the treasury's information network, managed by the People's Bank of China (PBC). 11. Project Costs and Financing. Total project cost including contingencies is estimated at $105.5 million. In addition, the IMF will contribute staff resources for TA and supervison of the tax administration component Of the total expenditures, 14.8 percent finances institutional development, 0.9 percent project implementation, 2.5 percent policy support, 45.4 percent automation, and the remainder (36.3 percent) consists of (five-year) incremental operating costs financed by the Government. The Bank Group will finance 92 percent of foreign exchange costs, 5.3 percent of local costs, and 47.4 percent of overall costs. Retroactive financing of SDR 3.1 million, or about $4.5 million, is recommended for purchases since March 1, 1995, which would cover procurement of Phase I equipment and the urgent needs in Consultancies and Training.  - 4 - 12. Project Implementation. For overall project coordination, a Project Coordination Team (PCI) has been set up, consisting of representatives from SAT and MOF. The MOF World Bank Department will coordinate the implementation team, and administer the project's Special Account. Three component-specific implementation teams have been established under the PCT. SAT will be responsible for the tax administration component. SAT has set up a Steering Commitee to lead the reform efforts, and created a Tax Administration Reform Office to administer the component. The Tax Policy Department of MOF and the Tax Reform and Legislation Department of SAT have set up a joint tax policy unit that will implement the tax policy component. The Budget Department of MOF will be responsible for the intergovernmental fiscal component and the budget systems component. A breakdown of costs and the financing plan are shown in Schedule A. Amounts and methods of procurement 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. The Technical Annex, Report No. P-6552-CHA dated April 3, 1995, is attached. 13. The Bank Group and IMF will continue close cooperation in supervison of the prqject. The IMF plans to assist the Bank Group in supervising the substantive aspects of tax administration and systems design and implementation. The Bank Group would retain overall supervision responsibility, including procurement and disbursements. 14. Project Sustainability. Total project costs are about 0.2 percent of annual tax collection, and about 2 percent of collection in the districts directly financed under the project. Thus, only a marginal improvement in collection efficiency would make the project sustainable and financially viable. 15. Lessons Learned from Previous BankIIDA Involvement. Bank Group and IMF involvement in tax administration projects suggests four key factors for success: (a) high political commitment; (b) a clear reform strategy; (c) a strong implementation team; and (d) use of pilot projects to test new systems and procedures before nationwide implementation. This experience also shows that procedural and organizational change should precede computerization, and that taxpayers' self-assessment combined with effective organizational arangements are key to an efficient tax administration. Bank Group experience in budget systems reforms shows that such reforms require a long lead time, and that a clear strategy for a revised budget system should precede implementation of reforms. 16. The Bank Group has no previous project experience in China's fiscal management, but there have been seven technical assistance projects: two Technical Cooperation Projects (Cr. 1412-CHA, Cr. 1664-CHA), a Planng Support and Special Studies Project (Cr. 1835-CHA), a Reform, Institutional Support and Preinvestment Project (Cr. 2447-CHA), a Financial Sector Technical Assistance Project (Cr. 2423-CHA), an Envionmental Technical Assistance Project (Cr. 2522-CHA) and an Economic Law Reform Project (Cr. 2654-CHA). Among the lessons learned are the need: (a) to ensure  - 5 - pohitical commitment to the goals of the project; (b) to avoid excessive financing of hardware; and (c) for finn implementation modalities, including for onlending. 17. The political commitment to fiscal reforms is high. The hardware is mainly procured for the tax administration, and is firmly supported by the overall reform strategy in that area. SAT's strategy aims to revise procedures and organization before new computer systems are developed, and includes pilot testing of the new tax administration before roll-out. The budget systems component intends to develop a long-term strategy for reforms in the budget system, and to build capacity to implement these reforns. The PCT and component implementation teams would provide effective implementation. MOF has provided assurances that it will allocate the required loan/credit funds to SAT and PBC free of charge. 18. Rationale for Bank/IDA Involvement. The current fiscal reforms are a high priority for the authorities, and the Minister of Finance has directly requested Bank Group and HIF assistance in the implementation of the reforms. The proposed project is consistent with the Bank's Country Assistance Strategy for China as presented to the Board in August 1993. Fiscal reforms are central to the strategy: improveri fiscal management would serve as a catalyst for reforms in other sectors such as banking and SEs, because increased and better-managed fiscal resources can relieve these sectors of government functions. Moreover, the Government's reform program corresponds closely with the recommendations the Bank Group has made in economic and sector work, and policy dialogue. The tax adminstration and intergovernmental fiscal components directly aim to implement current reforms. The project's tax policy and budget systems component would prepare future reforms complementary to the current refonns. 19. The Bank Group has significant expertise in the fiscal sector, and published two sector reports and a discussion paper on tax policy and tax adminishtation, intergovernmental fiscal relations and budget policy, and is working on studies in the field of Public Investment and Municipal Finance. 20. Environment Aspects. The project falls under environmental category C. 21. Project Benefits. The project would: (a) contribute to increased efficiency in revenue generation and government expenditure; (b) enhance the productivity of the tax administration and reduce burdens on the taxpayer; (c) increase the efficiency of the tax stucture; (d) improve the equitable distribution of govemment resources among provinces; and (e) improve allocation of budget resources. 22. Risks. The Government is very anxious to reform the tax administration quickly, and SAT may be pressured to rush the implementation of the project. This risk has been addressed by agreeing with SAT on a realistic timetable, and by the phased project design, which requires satisfactory implementation of one phase, before the next phase starts. Poor coordination among participating Chinese agencies may delay implementation. The structure of the implementaion teams would serve as a means to resolve potential conflict among these agencies, and minimize te risk. A third risk lies  - 6 - in overburdening key officials in MOF and SAT. This has been reduced by hiring local consultants under the project to supplement the staff of the participating agencies, and by phasing the activities over time. 23. Agreements Obtained at Negotiations. During negotiations, the Bank Group obtained agreements with the Borrower on: (a) proper phasing and realistic planning of the tax administration reforms; (b) systems assessment and improvements before procurement of equipment for the PBC treasury; (c) Borrower allocation of the credit/loan proceeds to the vaxious implementing agencies free of charge; (d) the modalities of project management, implementation and monitoring; and (e) adequate maintenance of equipment procured under the project. 24. Recommendation. I am satisfied that the proposed loan and credit would comply with the Articles of Agreement of the Bank and the Association, and recommend that the Executive Directors approve them. Sven Sandstrom Acting President Washington, D.C. April 3, 1995 Attachments  - 7 - Schedule A CHINA FISCAL TECINICAL ASSISTANCE PIROJECT ESMATED CQsi AND F)NANaNG PLAN La ($ million) Local Foreign Total TaM Administration 37.? 2mI Institutional Development 4.6 2.0 6.5 Project Implementation Support 0.4 0.4 0.8 Automation 1.3 36.2 37.4 Increnental Operating Costs 31.5 0.0 31.5 Tax Policgy 1 3 48 Institutional Development 0.3 2.1 2.5 Policy Support 0.7 0.9 1.6 Automation 0.1 0.5 0.5 Incremental Operating Costs 0.2 0.0 0.2 Intergovegnmental Fiscal Relations 1n 2.9 2.2 Institutional Development 0.6 0.7 1.2 Policy Support 0.1 0.2 0.3 Automation 0.1 1.0 1.2 Incremental Operating Costs 0.2 0.0 0.2 Budget CStes 2.0 2.2 4.2 Insttutional Development 1.5 1.4 2.9 Policy Support 0.2 0.1 0.3 Automation 0.1 0.9 0.9 Incremental Operating Costs 0.2 0.0 0.2 Total Bae Costs 42.0 46. BB 2 Price Contingencies 10.3 2.5 12.8 Physical Contingencies 2.1 2.3 4.4 Total Costs 54.4 51. 5OL Fmancing PIan Government and Participating Entities 51.4 4.0 55.4 Bank/IDA 2.9 47.1 50.0 'RWd 54.4 5iA La Totals may not add due to rounding.  - 8 - Schedule B Page 1 of 2 CHINA FISCAL TECNICAL ASSISTAN1iE PROJECT SUMMARY OF.PROPOSED PROCUREMENT ARRANGEMENTS ($ million, including contingencies) Procurement Method ICB NCB Other NBGF Total Cost Consultancies - 3.7& 2.8 6.6 (3.7) (3.7) Traing, Study Tours, - - 8.1kc 7.1 15.3 Seminars (8.1) (8.1) Goods 40.7/z 0.8/b 0.6L - 42.1 (36.7) (0.8) (0.6) (38.1) ncremental Operating Costs - - 41.6 41.6 T40:7 08 12.4 515 5.5 (3s6j) (0.8) (12.4) (50.0) NBGF: Not Bank Group-financed. La Accoding to the procedures in Guidefines for Procurement wider JERD and IDA Credis (January 1995). & Smaller equipment needs; estimated at 4 contracts. & Consulting Services would be procured in line wiLth the Bank guidelines, 7he Use of Consutants by World Bank Borrower and by the World Bank as an E&ecuing Agency (August 1981). Ls Off-the-shelf items and mateials (faxes, copiers, etc.) procured by national shopping; esdmated at 6 contac. Note: Figures in parentheses are the amounts financed by the Bank/IDA. Figures may not add due to rounding.  - 9 - Schedule B Page 2 of 2 DiSnURSErME ($ million) Amount of the Loan/ Percentage of Expenditure Category Credit Allocated to be Financed Goods 35.0 100% of foreign expenditures, 100% of local expenditures (ex-factory) and 75% for other items procured locally Consultants' services 3.2 100% Training seminars, workshops study tours 7.2 100% Unallocated 4.6 Total 50 Estimated IBRD./IDA Disbursements Bank/IDA FY 11997 i29 1999 ====-========----$ million Annual 10 30 8 2 Cumulative 10 40 48 50  - 10- Schedule C CHINA FISCAL TECHNICAL ASSISTANCE PROJECT TIErTALE OF KEY PROPECT PROCESSING EVENTS (a) Time taken to prepare the project: 12 months (b) Prepared by: State Administration of Taxation and the Ministry of Finance, with IMF and Bank Group assistance (c) First Bank Group mission: March 1994 (d) Appraisal mission departure: January 1995 (e) Negotiations: March 1995 (f) Planned date of effectiveness: August 1995 (g) List of relevant PCRs and PPARs: None The project was prepared by: Bert Hofmnan (Economist, EA2CO; Task Maager), Ike lkramullah (Senior Technology Specialist, IENTI), Tamar Manuelyan (Senior Economist, EA2CO), Min Zhu (Economist, PRDPE), assisted by John Brondolo (Tax Systems Information Officer, EMT), Tony Pellechio (Economist, DIM), and Carlos Silvari (Advisor, DMF). The peer reviewers were Fernando Montes-Negret (Principal Economist, FDS), Christine Wallich (ead Economist, EC2DR), and Milka Casanegra-Jantscher (Division Chief, IMF). The lawyer is Nicolette Dewitt (Senior Counsel, LEGEA), the Division Chief is Zafer Ecevit (EA2CO) and the Department Director is Nicholas C. Hope (EA2DR).  - 11 -- Schedule D Page 1 of 3 STATUS OF BANK GROUP OPERATIONS IN THE PEOPLE'S REPUBLIC OF CHINA A. STATEMENT OF BANK LOANS AND IDA CREDITS (As of December 31, 1994) Loan/ - Amount CUSS mitLion) Credit Bor- (net of cancelLations) Ntmber FY rower Purpose Bank IDA Undisb (a) 33 loans and 42 credits have been fully disbursed. 3,118.3 2,602.3 - Of which SECAL: 2967/1932 8B PRC RuraL Sector Adj. 200.a 93.2 - 2678/1650 86 PRC Third Railway 160.0 (70.0)(b) 10.4 2723/1713 86 PQC Rural Health & Preventive led. 15.0 65.0 12.9 1764 87 PRC Xinjiang AgricuLturaL Dev. - 70.0 1.9 2794/1779 87 PRC Shanghai Sewerage 45.0 (100.0)b) 6.6 281111792 87 PRC Beijing-Tianjin-Tanggu Expressway 25.0 125.0 9.6 2512/1793 87 PgC Gansu ProvinciaL 0ev. (20.0)Cb) 150.5 17.2 1535 87 PRC Planning Support & SpeciaL Studies - 20.7 5.2 2852 87 PRC Uujing ThermaL Power 190.0 - 8.2 2877/1845 85 PRC Huangpu Port 63.0 125.O)Cb) 7.4 1885 8S PRC Northern Irrigation - 103.0 8.9 2943 8B PRC Pharmaceuricals 127.0 - 0a8 2951/1917 88 PRC Sichuan Highway 75.0 C500)Cb) 22.7 2955 88 PRC BeiLungang 1I 165.0 22.3 2958 a8 PRC Phosphate Dev. 62.7 -9.4 2968 88 PRC Railway IV 200.0 - 13.4 1984 89 PRC Jiangxi Pro-incial Highway - 61.0 3-5 1997 89 PRC Shaanxi Agricultural Dev. - 106.0 18.8 2006 89 PRC textbook Development - 57-0 0-4 2009 89 PRC Integrated Reg. Health - 52.0 14.4 3006 89 PRC Ningbo & Shanghai Ports 76. - 9.2 3007 89 PRC Xiamen Port 36.0 - 1.3 3022 89 PRC Tianjin Light Industry 154.0 - 42.1 3060/2014 89 PRC Inner MongoLia RaiLway 70.0 (80.0)(b) 9.0 3066 89 PRC Hubei Phosphate 137.0 - 47.1 3073/2025 89 PRC Shandong Prov. Highway 60.0 (50.0)(b) 21.8 3075 89 PRC Fifth IndustriaL credit 300.0 0 C.5 2097 90 PRC Jiangxi AgriC: Dev - 60.0 3.2 2114 90 PRC Vocationat & Tech. Educ. - 50.0 5.5 2145 90 PRC NarionaL Afforestation - 300.0 89.9 2159 90 PRC Hebei AgricuLrural Dev- - 150.0 45.7 2172 91 PRC Hid-Tangtze AgriculturaL Dev. - 64.0 17.7 3265/218Z 91 PRC RuraL Credit IV 75.0 200.0 39.6 3274/2186 91 PRC RuraL Indust Tech (SPARK) 50.0 64.3 28.0 3286/2201 91 PRC Medium-Sized Cities Dev. 79g4 52_9 40.5 2210 91 PRC Key Studies Developuent - 131.2 45.3 2219 91 PRC Liaoning Urban Infrastructure - 77.8 10.6 3316/2226 91 PRC Jiangsu ProvL. Transport 100.0 C53.6UCb) 30.2 2Z42 91 PRC menan Agricul. Dev. - 110.0 64.Z 3337/2256 91 PRC Irrig. Agricul. Intensif. 147.1 187.9 101.8 3387 92 PRC Ertan Hydroelectric 380.0 47.3 2294 92 PRC Tarim Basin - 125.0 66.6 2296 92 PRC Shanghai Metro Transport 60.0 20.5 3406 92 PRC RaiLways V 330.0 127-5 3412/2305 92 PRC 0aguangba Multipurpose 30.0 37.0 14.6 2307 92 PRC Guangdong ADP - 162.0 711.5 3415/2312 92 PRC Beijing Environment 45-0 80.0 76.0 2317 92 PRC Infectious and Endemic Disease Cont - 129.6 103.8 3433 92 PRC Yanshi Thermal Power 180.0 - 32.2 2336 92 PRC Rural Water Supply and Sanitation - 110.0 68.8 2339 92 PRC Educ. Development in Poor Provs. - 130.0 70.8 3443 92 PRC Regional Cement Industry 82.7 - 38.7  - 12- Schedule D Page 2 of 3 Loan/ Amount CUSS milLion) Credit Bor- (net of cancellations) Number FY rower Purpose Bank IDA Undisb_(a) 3462 92 PRC Zouxian Thermal Power 310.0 - 229.3 3471 92 PRc Zhejiang Provincial Highway 220.0 - 137.3 2387 92 PRC Tianjin Urban Dent. & Envir. - 100.0 72.4 2391 92 PRC Ship Waste DisposaL - 15.0 15.9 2411 93 PRC Sichuan AgricuLtural Devt. - 147.0 93.2 3515 93 PRC Shuikou HydroeLectric II 100.0 - 68.5 2423 93 PRC Financial sector TA - 60.0 53.5 3530 93 PRC Guangdong Provincial Transport 240.0 - 178.0 3531 93 PRC Henan ProvinciaL Transport 120.0 - 83.0 2447 93 PRC Ref. Inst'L and Preinvest. - 50.0 43.5 3552 93 PQC Shanghai Port Rest. and Devt. 150.0 - 132.3 2457 93 PRC Changchun Water Supply & Env. 120.0 117.7 2462 93 PRC AgricuLture Support Services - 115.0 98.7 3560/2463 93 PRc Taihu Basin Flood Control 100.0 100.0 144.2 2471 93 PRC Effective Teaching Services - 100.0 98.2 3572 93 PRC Tianjin Industry II 150.0 - 150.0 3582 93 PRC South Jiangsu Envir. Prot- 250.0 - 235.9 2475 93 PRC Zhejiang Multicities Oevt - 110.0 97.4 3581 93 PRC Railway VI 420.0 - 362.4 3606 93 PRC Tianhuangping Hydroelectric 300.0 - 277.5 3624/2518 93 PRC Grain Distribution 325.0 165.0 475-5 2522 93 PRC EnvironmentaL Tech. Assist. - 50.0 45.9 - 2539 94 PRC RuraL Health Workers Devt. - 110.0 105_6 3652 94 PRC Shanghai Metro Transport 1I 150.0 - 74.0 3681 94 PRC Fujian Provincial Highways 140.0 - 122.6 3687 94 PRC Tetecammunicarions 250.0 - 250-0 2563 94 PRC Second Red Soils Area Oevt. - 150.0 140.8 2571 94 PRC Songliao Ptain Agric. Det. - 205.0 195.1_ 3711 94 PRC Shanghai Envvironment 160.0 - 157-0 3716 94 PRC Sichuan Gas Devt & Conservatn. 255.0 - 255.0 3718 94 PRC Yangzhou Thermal Power 350.0 - 350.0 3727 94' PRC Xiaolangdi Multipurpose 460.0 - 400.6 2605 94 PRC Xiaolangdi Resettlement - 110.0 107.9 2616 94 PRc Loess Plateau Watershed Devt. - 150.0 144.2 2623 94 PRC Forest Resource Devt. R Prot. - 200.0 192.3 3748 94 PRC -Rational Highway 380.0 - 380.0 3773/2642 95 PRC Ent. Housing/Soc Sec Reform 275.0 75.0 351.9 3781 95 PRC Liaoning Environment Cc) 110.0 - 110CO 3787 95 PRC Xinjiang Prov. Highways Cc) 150.0 - 150.0 2651 95 PRC Basic Ed for Poor/Minorities Cc) - 100.0 100.3 3788 95 PRC Shenyang IndustriaL Reform Cc) 175.0 - 175.0 2654 95 PRC Economic Law Reform Cc) - 10.0 10.0 2655 95 PRC Comp Maternal/Child HeaLth Cc) - 90.0 89.7 TotaL 12,118.6 8,026.2 8,697.6 of which has been repaid 1,005.7 14.2 Total now held by Bank and IDA 11,112.9 8,012.0 Amount soLd: Of which repaid - - Total Undisbursed 5,735.1 2,962.5 8,697-6 Ca) As credits are denominated in SORs (since IDA RepLenishment VI), undisbursed SOR credit balances are converted-to dollars at the current exchange rate between the dolLar and the SDR1 In some cases, therefore, the undisbursed balance indicates a dollar amount greater than the originaL principat credit amount expressed in dollars. (b) Credir fully disbursed. Cc) Not yet effective.  - 13 - Schedule D Page 3 of 3 S. STATEHENT OF IFC INVESTMENTS (As of Dece,ter 31, 1994) Invest- Type of Loan Equity Torat ment No. FY Borrower * Business (USS Million) -- 813/2178 85/ Guangzhou Auto Automobile 15.0 4.5 19.5 - 86/91 974 87/88 China Investment Co. DFCs 3.0 - 3.0 1020 88/ China Bicyctes Bicycte 17.5 3.4 20.9 92/94 BicycLes Co. Ltd. Manufacture I066 a8 Crown ELectronics Electronics 15.0 - 15.0 1119 89 Shenzhen SoLar Electric 2.0 1.0 3.0 Light/Power 3423 93 Shenzhen PCCP Manufacturing 4.0 1.0 5.0 3150 93 Yantai Cement Cement 28.7 2.0 30.7 3881 94 China Walden Mgt. Capitat Mkts. - 7.5 7.5 94 Dynamic Fund Venture - 20.0 20.0 CapitaL 94 Nembridge Inv. Securities mk - 8.0 8.0 Financing Instit. 95 Dalian Glass Glass 61.0 - 61.0 Totat Cross Commitments 146.2 47.4 193.6 Less canceLlations, tenainations, 57.3 . 57.3 repayments, wrice-offs, and sates Total Comaitmenms now Held by IFC 89.0 47.4 136.4 TotaL Undisbursed 17.5 28.4 45.9 1/20/95 EA2DR