Announcement of China to Receive World Bank Assistance for Industrial Credit on December 23, 1982

•Nodd Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (20.2) 477-1234 BANK NEWS RELEASE NO. 83/33 Contact: Sundaram Sankaran IDA NEWS RELEASE NO. 83/33 (202) 477-3962 December 23, 1982 CHINA TO RECEIVE WORLD BANK ASSISTANCE FOR INDUSTRIAL CREDIT The China Investment Bank (CIB) of the People's Republic of China will borrow $70.6 million to assist light industries with small- and medium-sized projects. The funds come from the International Bank for Reconstruction and Development (IBRD)--$40.6 million--and fr9m the International Developme~t Association (IDA)--$30 million. GIB was -?-stablished in December 1981 to finance industrial lending involving import of equipment and technology. It has opened branches in the cities of Shanghai and Tianjin, and Jiangsu province, which together produce a quarter of China's gross industrial output. The World Bank funds will provide CIB with its first foreign exchange I to be made available to state enterprises for modernization and expansicn projects. Most projects t9 be financed are expected to earn foreign exchange through exports. A number of CIB' s staff have receiv,;?d training from the World Bank ts • Economic Development Institute. There will be further training under the project in development banking. The IBRD loan is for 20 years, including five years of grace, with interest at a variable rate linked to the cost of IBRD borrowing. It also carries an annual commitment charge of 0.75% on undisbursed balances, and a front-end fee of 1.5% on the loan amount. The IDA credit is for 50 years, including 10 years of grace; it carries no interest but has a small annual service charge (0.5% on the undisbursed balances of the. credit, and 0.75% on the disbursed balances). With the approval of the combined IBRD loan and IDA credit, total World Bank lending to the People's Republic of China has now reached $530 million. In June 1981, the World Bank lent $200 million for a university development project; in June 1982, $60 million for agricultural developrr.ent in north China; and in November 1982, $124 million for port development and $75.4 million for agricultu:-al education and research. (Note: 0 The World Bank" stands for the IBRD and its affiliatf.:, IDA.) a NOTE: IDA credits are denominated in SDRs (Special Drawir.g Rights), which are valued on the basis of a "basket" of currencies. The U.S. ,;ollar equivalent of the SDR amount of the !DA credit reflects the exchange races existing at the tirae of negotiation cf the credit.