China - Textbook Development Project

Document of The World Bank FOR OFFICIAL USE ONLY &IiZ- 2c2W-~ .c..A" Repot No. P-5016-CHA MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 41.8 MILLION (US$57.0 MILLION EQUIVALENT) TO THE PEOPLE'S REPUBLIC OF CHINA FOR A TEXTBOOK DEVELOPMENT PROJECT MARCH 14, 1989 This document has a restricted distribution and may be used by recipicnts only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS US$1.00 = Yuan (Y) 3.7 Y 1.00 = US$0.27 (March 198PJ US$1.00 = SDR 0.73 SDR 1.00 = US$ 1.37 FISCAL YEAR January 1 - December 31 ACADEMIC YEAR September 1 - August 31 ABBREVIATIONS CTMRI - Curriculum and Teaching Materials Research Institute FILO - Foreign Investment and Loan Office GSM - Grams per square meter (measure of paper weight). HEPH - Higher Education Publishing House NRCPSST - National Review Committee for Primary and Secondary School Textbooks PEP - People's Education Press PIA - Project Implementation Agreement PIO - Project Implementation Office SEdC - State Education Commission XHS - Xinhua Shudian (Book Distribution Agency) GLOSSARY Province - China is divided into 23 provinces, 5 autonomous regions and three municipalities, Beijing, Shanghai, and Tianjin. In the report, the term 'province" refers to provinces, autonomous regions and municipalities.  FOR OFFICIAL USE ONLY CHINA Textbook Development Project Credit and Proiect Summary Borrower: People's Republic of China Beneficiaries: State Education Commission, provincial printing factories, university presses Credit Amount: SDR 41.8 million (US$57.0 million equivalent). Terms: Standard, with 35 years maturity Financing Plan: Government USS 57.6 million IDA USS 57.0 million Total US$114.6 million Economic Rate of Return: Not applicable Staff Appraisal Report: 7633-CHA, March 14, 1989 Map: IBRD No. 20981 This document has a restrcted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be discksed without World Bank authorization.  MEMORANDUM AND RECOMMENDATION OF THE PRESiDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS A PROPOSED CREDIT OF SDR 41.8 MILLION TO THE PEOPLE'S REPUBLIC OF CHINA FOR A TEXTBOOK DEVELOPMENT PROJECT 1. The following memorandum and recommendation on a proposed development credit to the People's Republic of China for SDR 41.8 million (US$57.0 million equivalent) is submitted for approval. The proposed project would be on standard IDA terms with 35 years maturity and would help finance a textbook development project. 2. Background. In 1985, the Government of China announced the bDecision on Reform of the Education Structure, which emphasized the importance of education as the key to national development and established three basic policies: to universalize basic education (nine years); to expand vocational and technical education; and to improve and restructure higher education. These policies have implications for the textbook subsector through both quality improvement and enrollment expansion. At present, China's textbook production and distribution system delivers 2.6 billion textbooks to over 200 million students each year. Although the number is generally adequate, Chinese educators recognize deficiencies in textbook content, production quality and diversity. To address these problems, the Government has designed a textbook upgrading program with specific targets to improve the educational effectiveness and quality of textbooks at all levels of schooling, to increase the variety of published textbooks and to improve the efficiency of textbook manufacture. 3. Rationale for IDA Involvement. Bank education operations in China concentrated initially on alleviating urgent manpower shortages through expansion and improvements in higher and technical education. More recently, the Bank and the Government agreed to a broader strategy to support the three major aims of the education reform. Upgrading textbooks is an important aspect of the overall reform. The proposed project was identified based on the findings and recommendations of a sector study. Sector work and project preparation have provided the opportunity for dialogue between the Government and the Association, which has led to the adoption of a slower and more realistic pace of implementing the program for new texts, more flexible pricing arrangements, diversified distribution channels for higher education texts and targeted subsidies to poor families for textbook purchase rather than generalized support to publishers. The project would complement the Second University Project (Credit 1551-CHA) which addresses curriculum reform and the Teacher Training Project (Credit 1908-CHA) which improves training of lower secondary teachers. 4. Project Objectives. The project would improve textbooks at primary, secondary and tertiary levels. Specifically, it would: (a) assist in updating the content and pedagogy of the new 1990s set of primary and secondary textbooks; (b) support the development of audiovisual aids and expane the library collection and facilities used for research and manuscri development; (c) introduce modern technology for preparing and editing manuscripts, typesetting, printing and binding; (d) support a  - 2 - coordinated program of equipment purchase for textbook manufacture in order to develop maximum compatibility between various production processes and an appropriate level of standardization; (e) improve publishing and production management, upgrade technical skills of publishers and workers; and (f) improve book distribuition mechanisms. 5. Project Description. The proposed project would have five components. The first component would provide equipment and reference books to assist departments under the State Education Commission (SEdC) to (1) develop a modern teaching program; (2) increase their capacity to produce audiovisual materials; (3) augment the library collection; (4) computerize manuscript preparation; and (5) facilitate book distribution and to monitor inventories and sales. The second component would assist the Higher Education Publishing House (HEPH) in building and equipping a printing factory in Tianjin. It would also provide equipment for the People's Education Press (PEP) factory and the Beijing Printing Institute. The third component would provide equipment and civil works for printing factories in 22 provinces. The fourth component would provide equipment and civil works for 21 university publishing houses and printing factories. Over 1,000 pieces of typesetting, plate making, printing, binding. and auxiliary and related equipment would be procured for this purpose. The fifth component would provide training and technical assistance in support of the first four components. The coordinated training program would comprise (1) overseas study tours and fellowships: (2) visits to China by foreign experts; (3) training courses in China dasigned and conducted by foreign experts; (4) training courses designed and conducted by local experts; (5) attendance of project personnel at existing courses and training programs in publishing and printing; and (6) training provided by equipment manufacturers. A breakdown of costs and the financing plan are shown in Schedule A. Amounts autd methods of procurememt and of disbursement 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. A map is also attached. The Staff Appraisal Report No. 7633-CHA dated February 24, 1989 will be distributed separately. 6. Agreed Actions. The Government has already completed the following actions: (a) submitted to IDA a report on the Liternal appraisals of subprojects conducted by SEdC; and (b) discussed with IDA the format of the Project Implementation Agreement (PIA) to be reached between SEdC and participating provincial authorities. Signing of PIAs -ould be a condition of credit effectiveness. In addition, the Government has agreed to undertake the following actions: (a) submit to IDA for its review a plan for inservice training of primary and secondary school teachers in the use of the new textbooks by July 1, 1990; (b) carry out training in accordance with a program reviewed annually with the Association; (c) make the proceeds of the Credit available to the beneficiaries on terms and conditions satisfactory to IDA; (d) establish a framework for flexible textbook pricing in accordance with principles acceptable to IDA; (e) maintain a Project Steering Committee to monitor project implementation; (f) establish and maintain implementation offices in universities and  provincial bureaus to manage day-to-day activities; (g) monitor progress of the proposed project using an agreed set of performance indicators and provide annual reports from 1990 on; and (h) furnish annual audit reports within eight months of the end of the fiscal year. 7. Benefits. The principal benefits of the proposed project would be improved textbooks with respect to educational effectiveness, content, variety and physical quality. By 1995, the content of all primary and secondary textbooks would be revised and printed on improved paper. Textbooks for grades 1 to 3 would be in color. These changes would improve pedagogic effectiveness and reinforce curricular changes being undertaken by the Government. By 1992. 502 of textbooks for higher education would be published, as compared to 20? now; many of the remaining books, which are now reproduced by mimeographing, would be printed by offset, and new distribution mechanisms would be in place, thereby bringing to larger numbers of university students up-to-date information packaged in more durable and readable books. Training and technical assistance would also aid the development of the publishing and printintg institutions. By providing modern equipment to supplement existing facilities, the project would improve the efficiency of textbook manufacture and expand the overall capacity of the printing industry in China to meet the accelerating demand for printed reading matter throughout the society. 8. Risks. The major risk is that full advantage will not be taken of the improved equipment and processes because of failure to adopt andlor implement a satisfactory training and technical assistance program. This risk would be mitigated through contracting management of the program to an experienced agency acceptable to the Association. 9. Recommendation. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association and recommend that the Executive Directors approve the proposed credit. Barber B. Conable President Attachments Washington, D.C. March 14, 1989  -4- Schedule A CHINA Textbook Development Proiect "stimated Costs and Financing Plan Estimated Cost: /a Local Foreign Total ----- (US$ million) ------ PEP/CMTRI/SEDC 0.53 1.21 1.73 HEPHIPEP Printing Factories/BPI 5.68 7.73 13.41 Provincial printing factories 29.69 30.13 59.82 University publishing and printing 9.37 15.94 25.31 Training 0.62 0.71 1.33 Specialist Services 0.20 0.64 0.84 Total Base Cost 46.0J 56.36 102.44 Physical contingencies 2.30 2.82 5.12 Price contingencies 2.57 4.42 6.99 Total Project Cost 50.96 63.60 114.55 Financing Plan: IDA - 57.00 57.00 Government 50.96 6.60 57.55 Total 50.96 63.60 114.55 /a Project financed goods are exempt from import duties and taxes.  Schedule B Page 1 of 2 CHINA Textbook Development Project Procurempnt Method and Disbursement (in US$ million) Procurement Arrangements: Procurement method Total Category of Expenditure ICB LCB Other cost la Civil works - - 23.65 23.65 Equipment 58.11 29.85 87.95 (55.06) (55.06) Books & educational materials - - 0.49 0.49 (0.44) (0.44) Training - - 1.51 1.51 (0.79) (0.79) Specialist services - - 0.95 0.95 (0.71) (0.71) Total 58.11 29.85 56.59 114.55 (55.06) (1.94) (57.00) Note: Figures in parentheses are the prospective amounts financed by the Association. /a Totals represent total estimated costs per category including price and physical contingpncies.  -6- Schedule B Page 2 of 2 Disbursements Category Amount _ (US$ million) Equipment 55.1 ) 1002 of foreign expenditures, Books & Educational Materials 0.4 ) 1002 of local (ex-factory) expenditures and 75Z of local expenditures of locally procured goods. Training and Fellowships 0.8 1002 of total expenditures Specialist Services 0.7 1002 of total expenditures Total 57.0 Estimated IDA Disbursements IDA FY 1989 1990 1991 1992 1993 1994 1995 ---------------- us$ million ------------------------ Anvual 0.3 8.8 18.3 14.2 12.3 2.7 0.4 Curalative 0.3 9.1 27.4 41.6 53.9 56.6 57.0  Schedule C CHINA Textbook Development Project Timetable of Key Project Processing Events (a) Time taken to prepare 24 months (b) Prepared by State Education Commissio:. with IDA assistance (c) First IDA missior. June, 1987 (d) Departure of a'praisal mission March, 1988 (e) Negotiations December, 1988 (f) Planned date of effectiveness August, 1989 (g) List of relevant PCR and PPARs University Development Project I (PPAR dated December 30, 1988)  - 8 - Schedule D Page 1 of 3 STATUS OF BANK GROUP OPERATIONS IN THE PEOPLE'S REPUBLIC OF CHIN A. STATEMENT OF BANK LOANS AND IDA CREDITS (as of September 30, 1988) Loan/ Amount (US$ million) Cred.t Fiscal (less cancellations) Number Year Borrower Purpose Bank IDA Undisbursed la One loan and two credits have been fully disbursed 202111167 81 PRC University Development 100.00 100.00 0.00 1261 82 PRC North China Plain Agriculture - 60.00 0.00 2207 83 PRC Three Ports 67.97 - 0.77 1297 83 PRC Agric. Education & Research - 75.40 3.45 2226/1313 83 PRC Industrial Credit I (CIB I) 40.60 30.00 4.89 2231 83 PRC Petroleum I (Daqing) 162.40 - 20.43 2252 83 PRC Petroleum II (Zhongyuan-Wenliu) 100.80 - 28.68 2261/1347 83 PRC State Farms I (Heilongjiang) 25.30 45.00 1.24 i411 84 PR' Polytechnic/TV University - 85.00 27.02 1412 84 PRC Technical Cooperation - 10.00 1.12 1417 84 PRC Rubber Development - 100.00 22.53 2382 84 PRC .Lubuge Hydroelectric 145.40 - 45.28 2394 84 PRC Railway 220.00 - 34.82 1462 84 PRC Rural Credit I - 50.00 0.17 1472 84 PRC Rural Health & Hedical Educ. - 85.00 21.80 2426 84 PRC Petroleum III (Karamay) 99.50 - 27.89 2434/1491 84 PRC Industrial Credit II (CIB II) 105.00 70.00 21.22 244411500 84 PRC Agricultural Education II 45.30 23.50 16.02 1516 85 PRC Agricultural Research II - 25.00 10.66 1551 8S PRC University Development II - 145.00 63.78 2493 85 PRC Power II 117.00 - 38.07 2501 85 PRC Changcun (Luan) Coal Mining 120.50 - 107.09 1577 85 PRC Seeds - 40.00 15.00 1578 85 PRC Rural Water Supply - 80.00 61.41 2539/1594 85 PRC Highway I 42.60 30.00 32.39 2540 85 PRC Railway II 235.00 - 197.21 2541 85 PRC Fertilizer Rehabilitation & 97.00 - 28.44 Energy Saving 1605 85 PRC Forestry Development - 47.30 34.92 257911606 85 PRC PiShiHang-Chaohu Atea Development 17.00 75.00 54.36 2580 85 PRC Weiyuan Gas Field Technical 25.00 - 14.93 Assistance 1642 86 PRC Rural Credit II - 90.00 26.41 265911663 86 PRC Industrial Credit III (CID III) 75.00 25.00 20.79 1664 86 PRC Technical Cooperation Credit II - 20.00 19.34 1671 86 PRC Provincial Universities - 120.00 71.23 2678/1680 86 PRC Third Railway 160.00 70.00 219.98 2689 86 PRC Tianjin Port 130.00 - 119.65 1689 86 PRC Freshwater Fisheries - 60.00 30.07 2706 86 PRC Beilungang Thermal Power 225.00 - 184.32 2707 86 PRC Yantan Hydroelectric 52.00 - 30.52 2708 86 PRC Liaodong Bay Petroleum Appraisal 30.00 - 17.31  9 Schedule D Page 2 of 3 Loanl Amount (US$ million) Credit Fiscal (less cancellattons) Number Year Borrower Purpose Bank IDA Undisbursed /a 2723/1713 s8 PRC Rural Health & Preventive Med. 15.00 65.00 69.56 1733 87 PRC Red Soils - 40.00 20.92 2775 87 PRC Shuikou Hydroelectric 140.00 - 118.47 278311763 87 PRC Industrial Credit IV (CIB IV) 250.00 50.00 235.69 2784 87 PRC Shanghai Machine Tools 100.00 - 98.99 1764 87 PRC Xinjiang Agricultural Development - 70.00 68.29 281111792 87 PRC Beijing-Tianjin-Tanggu Expressway 25.00 125.00 131.48 2812/1793 87 PRC Gansu Provincial Development 20.00 150.50 158.82 1835 87 PRC Planning Support & Special Studies - 20.70 19.10 2794/1779 87 PRC Shanghai Sewerage 45.00 100.00 137.10 2838 87 PRC Fertilizer Rationalization 97.40 - 96.90 2852 87 PRC Wujing Thermal Power 190.00 - 190.00 1871 88 PRC Rural Credit III - 170.00 119.67 287711845 88 PRC Huangpu Port 63.0 25.00 88.55 2907/1875 88 PRC Dalian Port 71.0 25.00 94.49 188S 88 PRC Northern Irrigation - 103.00 93.81 2924/1887 88 PRC Coastal Lands Development 40.00 60.00 96.78 1908 88 PRC Teacher Training - 50.00 47.49 2943 88 PRC Pharm&ceuticals 127.00 - 127.00 2951/1917 88 PRC Sichuan Highway 75.00 50.00 121.58 2952 88 PRC Shaanxi Highway 50.00 - 50.00 1918 88 PRC Daxing An Ling Forestry - 56.90 53.04 2955 88 PRC Beilungang II 165.00 - 165.00 2958 88 PRC Phosphate Development 62.7 - 62.7 296711932 88 PRC RSAL 200.00 100.00 109.06 2968 88 PRC Railway IV 200.00 - 200.00 Total 4,374.47 2,822.30 of which has been repaid 63.82 - Total now held by Barn and IDA 4,290.65 2,822.30 Amount sold: Of which repaid - - Total Undisbursed 2,946.46 1,503.25 4,449.71 /a As credits are denominated in SDRs (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 dollars. Notest 1) The status of the projects listed in Part A is described in a separate report on all Bank/IDA financed projects in execution, which is updatt-d twice yearly and circulated to the Executive Directors on April 30 and October 31. 2) Since the date of this Statement (September 30, 1988) a credit and three loans have been approvedt Jiangxi Highway for SDR 44.7 million ($61.0 million equivalent), Ningbo and Shanghai Ports for $76.4 million, Xiamen Port for $36.0 million and Tianjin Light Industry for $154.0 million.  - 10 - Schedule D Page 3 of 3 B. STATEMENT OF IFC INVESTMENTS (as of September 30. 1988) Invest- Fiscal Type of Loan Equity Total ment no. year Obligor business -- (US$ mil'lion) -- B13 1985 Guangzhou and Peugeot Automobile 15.00 2.00 17.00 Q74 1987 China Investment Co. Investment 3.00 0.04 3.04 1020 1987 Shenzen China Bicycle 5.00 - 5.00 Bicycles Co. Ltd. Manufacture Total Gross Commitments 23.00 2.04 25.04 Less cancellations, terminations repayment and sales - - - Total Covmitments now Held by IFC 23.00 2.04 25.04 Total Disbursed 6.50 0.04 6.54 Total Undisbursed 16.50 2.00 18.50  am 20981 '0 70 80d O /j1Ot 2t3 40 SING 84/ <N D.P.R U S. OF R. U. S. S. R. GANSU@ N HLOXA/A LAANAMAH"NG /_-5 t >> dt 69 > .< ~~~~~~~~~~~~~~~Harbin ^ g ~~~~~~MONGOLIA Cha hunt .SX -4e~~~~~~~~~~~~ <_ InchuAim qt, t S RE.P.R. O F JAP XhVJAM KOREA~aita5 j ORA _, Sd K SIC/-AN I /4Hoho/ Hot SAN/H 6W TEXTBOOK DEVEPALOPMENT 01:A HUGA 4f N ; PEOROJECT OVA2' N.Xi OVA ON 2 Provincial Printing Factory VU Y(JNNAN 6 GU41VGXY S GUANGJ=* ; | and University Press Locations 7_ f v 0 ProvIncial PrInting 0 Selected Tone D PILTPPI NES Patre *w _ catain cc D R Wf_: , - Probce Bmeiulen P DAN internatIonal Sommde,leHUeEI0l "~~~~' NEPAL 0Lhasa -(.160epohr", ~~ ~ ~ ~ ~ sy i