World Bank-China partnership has grown in strength and scope since China became member of the World Bank Group in 1981. It is now a partnership of global significance. China is the World Bank's largest and one of the best borrowers.

With nearly $28 billion committed to China through 184 loans and credits over the 1981-1997 period, the World Bank has become China's largest multilateral lender, although the World Bank's 1996 commitments to China as a share of Chinese external capital inflows that year were only 8 percent of the total. The agricultural sector has been the largest recipient of those commitments (slightly over 25 percent of the total), substantially higher than the sector's share in the overall World Bank lending, which now stands about 15 percent.

The importance of agricultural lending to China is explained by two factors. With one fifth of the world's population and one of the fastest growing economies in the world, China has the potential to significantly affect the global food and fiber situation. That will depend on China's future demand growth, the capacity to meet that demand domestically and the extent to which China will enter global markets. Another factor is China's project performance.

According to the World Bank's Operations Evaluation Department, which routinely audits all World Bank financed projects, the Chinese projects show a the highest success rate regardless of how effectiveness of the World Bank lending is assessed. It has highest rating in the extent to which loan conditions are met, the speed of project implementation, project impact as reflected in return on investments effect on poverty reduction or prospects for sustainability. Agricultural sectors typically faired less well than some other sectors in the World Bank's overall lending, but once again China's success stands out. (World Bank, 1997b, 1995, 1994 OED Reports)

What explains this outstanding performance, what role has the World Bank played in Chinese agricultural development and trade, how can it be expected to contribute in the future, and what lessons does the World Bank-China partnership offer to other countries?

World Bank Report