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China began its partnership with the Bank in 1980, just as it embarked on its reforms. Starting as a recipient of support from the International Development Association (IDA), the Bank Group’s fund for the poorest, China graduated from IDA in 1999 and became a donor in 2007. It became the World Bank’s third largest shareholder upon completion of the capital increase approved in 2010, the 30th anniversary of its partnership.

The nature of the Bank’s activities in China has evolved over time as China’s needs and level of development have changed. In the early years, the World Bank brought international experience to help design economic reform strategies, improve project management, and address key bottlenecks to growth. More recently, this two-way relationship has evolved —the World Bank offers international expertise to help address China’s key development challenges and pilot reforms through projects and programs; and China’s development experiences enhance the Bank’s global knowledge and capacity to help other developing countries.

Research

Joint flagship studies have been important for deepening the dialogue on policies and Bank programs and provided a model for other middle-income countries. China 2030: Building a Modern, Harmonious, and Creative Society, a joint report by the World Bank and the Development Research Center of China’s State Council, lays out six strategic directions for China’s future: completing the transition to a market economy; accelerating the pace of open innovation; going “green” to transform environmental stresses into green growth as a driver for development; expanding opportunities and services such as health, education and access to jobs for all people; modernizing and strengthening its domestic fiscal system; and seeking mutually beneficial relations with the world by connecting China’s structural reforms to the changing international economy.

Urban China: Toward Efficient, Inclusive, and Sustainable Urbanization, also a joint report by the World Bank and the Development Research Center of China’s State Council, recommends that China curb rapid urban sprawl by reforming land requisition, give migrants urban residency and equal access to basic public services, and reform local finances by finding stable revenues and by allowing local governments to borrow directly within strict central rules.

Healthy China: Deepening Health Reform in China, Building High-Quality and Value-Based Service Delivery, a joint study on reforming China’s health system in collaboration with the Ministry of Finance, the National Health and Family Planning Commission, and the World Health Organization, recommends deeper healthcare reforms by creating a new model of people-centered quality integrated health care that strengthens primary care as the core of the health system; continuously improving health care quality; empowering patients with knowledge and understanding of health services; boosting the status of the health workforce, especially primary-care providers; allowing qualified private health providers to deliver cost-effective services; and prioritizing public investments.

Innovative China: New Drivers of Growth, a joint report by the Development Research Center of China’s State Council, the Ministry of Finance and the World Bank Group proposes that China addresses its productivity challenges by promoting the “three Ds” – removing distortions in the economy, accelerating diffusion of existing advanced technologies and innovations, and fostering discovery of new technologies, products, and processes so as to expand China’s productivity frontier. The report develops recommendations in seven areas to promote the “three Ds.” These recommendations focus on strengthening competition across product and factor markets and creating a level playing field for all investors, investing in human capital and improving the targeting of support for innovation and entrepreneurship, and adapting the model of economic governance to adjust the balance between the state and the market.

Four Decades of Poverty Reduction in China: Drivers, Insights for the World and the Way Ahead, a joint report by the Development Research Center of China’s State Council, the Ministry of Finance and the World Bank Group reviews China’s success in eliminating extreme poverty. It shows that sustained growth and economic transformation created the opportunities that helped close to 800 million poor Chinese achieve an income above $1.9 per day. The report also shows that public investments in infrastructure and more recently increased targeted transfers played an important role in poverty reduction. China’s success was aided by favorable initial conditions and catalyzed by China’s economic reform starting in the late 1970s. Nonetheless, some 220 million Chinese still had incomes below $5.5 a day in 2019. Going forward, the report concludes, China’s social policies need to evolve to address the specific vulnerabilities of this group.

The China Country Climate and Development Report (CCDR) is the World Bank Group’s new core diagnostic report that provides analysis and recommendations on integrating China’s efforts to achieve high-quality development with the pursuit of emission reduction and climate resilience. According to the report, climate risks pose a threat to China’s long-term prosperity. The country’s transition to carbon neutral and resilient development will create transition risks. Yet, China is also well positioned to turn climate action into an economic opportunity. The report shows that broader structural and market reforms could complement climate action and help achieve China’s climate and development objectives. The CCDR recommends six interconnected policy packages, which will allow China to green and grow its economy at the same time.

A new joint flagship study addressing the challenges of decarbonizing and greening China’s economy is under preparation.

Projects

World Bank-financed projects introduced innovations or piloted new approaches and serve as platforms for knowledge exchange.  Many of them also placed a major emphasis on the environment and climate change. Here are some of our recent projects and results in China:

The Yangtze River Protection and Ecological Restoration Program (Hubei), approved in March 2023, aims to enhance ecological protection and reduce water pollution along China’s Yangtze River basin in Hubei Province. This financing will strengthen ecosystem management, reduce water pollution from plastics and animal manure, and improve wastewater treatment. The program focuses on improving coordination, data collection and sharing, and water management planning and allocation across the river basin. At the provincial level, program activities will help strengthen the policy and institutional responses. At the sub-basin level, integrated water management planning and operations will be carried out in the Qing River basin and Hong Lake basin.

The Plastic Waste Reduction Project (Shaanxi), approved in March 2023, helps reduce plastic pollution from municipal solid waste and agricultural plastic film in rural areas of China’s Shaanxi Province, and improve provincial plastic waste management with potential lessons for the national level. The project will support China’s effort to improve plastic waste management, reduce plastic pollution as well as GHG emissions, strengthen provincial regulations and institutional capacities, and establish models for urban-rural integration in waste management. The experience gained through this project is expected to be replicated and inform reforms and practices in other provinces as well as further policy work at the national level.

The Yellow River Basin Ecological Protection and Environmental Pollution Control Program, approved in March 2022, helps address water scarcity and ecosystem degradation in China’s Yellow River basin. The program will support China’s strategy for the basin, and will contribute to core objectives of the national plan around ecological and environmental protection and promoting water conservation. Provincial level activities will support ecological protection, water use efficiency, and water pollution control in the middle reach of the Yellow River, where erosion, ecosystem degradation, and water scarcity are pronounced.

The Green Agricultural and Rural Revitalization Program for Results, approved in March 2022, promotes green agriculture and rural development in China’s southwest region and supports the Chinese government’s national Rural Revitalization Program. Program activities comprise institutional capacity building, training and agricultural extension services, financial incentives to promote climate-smart and greener agriculture technologies and practices, and investments in rural wastewater and solid waste management services. The program also includes investments in monitoring, evaluation, and verification of environmental outcomes. It also supports the development of program-based budgets to better link resource use with outcomes at the local government level.

The Yangtze River Protection and Ecological Restoration Program, approved in December 2021, helps enhance ecological protection and reduce water pollution in China’s Yangtze River basin. The program will support coordination across line agencies and levels of government by strengthening data collection and sharing, and by improving water management and allocation. Local level activities will help reduce plastics pollution by developing incentives for the collection of agricultural plastic film, improve wastewater management and collection systems at the township level, and address agricultural pollution through improved management of livestock manure.

The China Plastic Waste Reduction Project, approved in June 2021, helps improve plastic waste management at the national and subnational levels in China and reduce plastics pollution from municipal solid waste. At the national level, the project will help develop policy and implementation mechanisms to reduce plastics pollution, improve resource utilization through recycling, and support waste minimization and prevention. At the subnational level, it will help improve the functionality of solid waste management systems, demonstrate the urban-rural integration of solid waste management and plastic pollution control, and pilot enhanced separation of wastes and increased recycling rates.

The Green Finance Demonstration Project, approved in June 2021, supports the establishment of a Green and Low-Carbon Investment Fund in China. The national-level Fund will develop and demonstrate best-practice environmental standards, and will help catalyze additional private capital from domestic and foreign institutional investors, providing much-needed long-term equity financing to smaller private green innovators and qualified green projects.

The Hunan Subnational Governance and Rural Public Service Delivery Program for Results, approved in February 2021, assists the province in delivering more equitable and efficient public services in rural areas. The financing supports measures to strengthen local debt management and provide results-oriented transfers aimed at reducing disparities in the quality of basic education in rural areas. It would also introduce greater accountability by making budget information more transparent and accessible to citizens.

The China Food Safety Improvement Project, approved in March 2021, helps China improve food safety management at both the national and targeted subnational levels, and reduce food safety risks. It will strengthen food safety regulations, enforcement, and compliance along selected value chains， consistent with global practices, and help farms and food enterprises to access finance for food safety technologies, and organize risk communication campaigns to promote food safety and advocate for healthier lifestyles.

Last Updated: Apr 20, 2023