Document of the International Development Association Acting as Administrator of the Interim Trust Fund FOR OFFICIAL USE ONLY Report No: P-7140-CHA MEMORANDUM AND RECOMMENDATION OF THE MANAGING DIRECTOR TO THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION ONA PROPOSED INTERIM FUND CREDIT IN AN AMOUNT OF SDR 108.5 MILLION TO THE PEOPLE'S REPUBLIC OF CHINA FORA QINBA MOUNTAINS POVERTY REDUCTION PROJECT May 15,1997 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without WorklBank authorization. CURRENCY EQUIVALENTS (As of March 1997) Currency Unit = Yuan (Y) $1.00 = 8.30 Y 1.00 = $0.12 WEIGHTS AND MEASURES 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 miles 1 square kilometer (km2) = 100 ha 1 hectare (ha) = 2.47 acres = 15 mu I ton (t) = 1,000 kg = 2,205 pounds 1 kilogram (kg) = 2.2. pounds ABBREVIATIONS AND ACRONYMS 8-7 Plan - National Seven-Year Plan for Poverty Reduction (1994-2000) FCPMC - Foreign Capital Project Management Center ITF - Interim Trust Fund LGPR - Leading Group for Poverty Reduction OED - Operations and Evaluation Department PADO - Poor Area Development Office PLG - Project Leading Group PMO - Project Management Office SWPRP - Southwest Poverty Reduction Project (CN-PE-3639) TVE - Township and Village Enterprise FISCAL YEAR January 1 - December 31 Vice President: Jean-Michel Severino, EAP Director: Nicholas C. Hope, EA2 Division Chief: Joseph Goldberg, EA2RS Staff Member: Alan Piazza, Senior Economist, EA2RS FOR OFFICIAL USE ONLY CHINA QINBA MOUNTAINS POVERTY REDUCTION PROJECT LOAN/INTERIM TRUST FUND CREDIT AND PROJECT SUMMARY Borrower: People's Republic of China Beneficiaries: Sichuan and Shaanxi Provinces, and Ningxia Hui Autonomous Region Poverty: Program of Targeted Interventions Amount: Loan: $30.0 million ITF Credit: SDR 108.5 million ($150 million equivalent) Terms: Loan: 20 years, including 5 years of grace, at the Bank's standard variable interest rate for LIBOR-based US dollar single currency loans ITF Credit: IDA standard terms with 35 years' maturity Commitment Fee: Loan: 0.75 percent on undisbursed loan balances, beginning 60 days after signing, less any waiver ITF Credit: 0.50 percent on undisbursed loan balances, beginning 60 days after signing, less any waiver Onlending Terms: Microfinance Cooperatives: 15 years, including 5 years of grace, at 2.88 percent annual interest rate or more TVEs: Agricultural Bank of China's standard terms Foreign Exchange Risk: borne by the project provincial governments Financing Plan: See Schedule A Economic Rate of Return: 40 percent overall Staff Appraisal Report: 16390-CHA Map: IBRD 27815 Project ID Number: CN-PE-3590 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. 4 9 MEMORANDUM AND RECOMMENDATION OF THE MANAGING DIRECTOR TO THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association Acting as Administrator of the Interim Trust Fund) ON A PROPOSED INTERIM FUND CREDIT TO THE PEOPLE'S REPUBLIC OF CHINA FOR A QINBA MOUNTAINS POVERTY REDUCTION PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed Interim Fund Credit of SDR 108.5 million ($150 million equivalent) to the People's Republic of China to help finance a Qinba Mountains Poverty Reduction Project. In addition to the Interim Fund Credit, a proposed Loan of $30.0 million is also being separately submitted to help finance a Qinba Mountains Poverty Reduction Project. (The proposed Loan would be at the Bank's standard interest rate for LIBOR-based US dollar single currency loans, with a maturity of 20 years, including 5 years of grace.) The Credit would be on standard IDA terms, with a maturity of 35 years. The proceeds of the Loan and Interim Fund Credit would be made available to the provincial governments of Sichuan, Shaanxi and Ningxia for 17 years, including 5 years of grace, with interest at 2.0 percent per year. The foreign exchange risk would be borne by the provinces of Sichuan, Shaanxi and Ningxia for their respective components. 2. Sector Background. Broad participation in reform-driven rural economic growth brought about a tremendous reduction in absolute poverty in China from roughly 270 million poor in 1978 to about 100 million in 1985, or from one third to less than one tenth of total population. With continued rapid overall economic growth and strong government commitment to poverty reduction, the number of absolute poor declined to less than 70 million by the end of 1996. At least half of China's most severely affected remaining absolute poor are now concentrated in remote resource-deficient rural areas- primarily in upland regions of the interior provinces of central and western China-where they typically comprise entire communities. The very poorest households in these communities are those further disadvantaged by high dependency ratios, ill health and other difficulties. Minority peoples are heavily overrepresented among the rural poor. Although the absolute poor have land use rights, as do all of China's rural population, in most cases the land itself is of such low quality that even subsistence levels of crop production are generally impossible. Achieving productivity gains on these rainfed uplands, through increased application of fertilizer, better seed and other modern inputs, has proven problematic, and the number of the absolute poor now exceeds the carrying capacity of the land. Furthermore, since these are in many cases some of China's most ecologically fragile lands, the poor are often both the perpetrators and victims of upland environmental destruction. 3. One tenth-or about 6 million--of China's remaining absolute poor reside in the remote upland areas of Sichuan, Shaanxi and Ningxia. Absent sufficient increases in -2- agricultural production and rural enterprise development in these upland areas during the 1980s, per capita output of grain and subsistence foods failed to sustain any significant increase and off-farm employment opportunities have little more than kept pace with population growth. Provision of social services has also stagnated in these areas, and current levels of education achievement and health status are deplorable. At least half of the children in the poorest towns and villages do not complete elementary school and will not achieve literacy. Infant mortality rates in the poorest townships and villages exceed 10 percent, and are about triple the national average. Incidence of several infectious and endemic diseases, including tuberculosis and iodine deficiency disorders, are also prevalent in these areas. Roughly half of the children in households at or below the absolute poverty line are at least mildly malnourished (stunted), and iron, vitamin A, and other micronutrient deficiencies remain a severe problem. As many as 90 percent of poor children suffer chronic intestinal worm infection. 4. Labor market liberalization in China, spurred by strong economic growth and reduced constraints to internal travel and change of residency, has led to unprecedented labor mobility by at least 100 million migrants in a total rural labor force of 450 million. For those who have been able to participate in the local and interprovincial migration for employment process, the income rewards have been substantial. Off-farm employment opportunities are particularly important for the upland poor, since most are severely underemployed throughout most or all of the year. However, the absolute poor in upland areas have not been able to fully take part in the labor migration process due to (a) labor- market imperfections such as the lack of labor market information, (b) the poor's paucity of even rudimentary knowledge and skills required for obtaining employment in growth pole areas, and (c) inadequate financial resources to cover the initial expenses of a job search. 5. The Government's poverty reduction program, established in 1986 and coordinated by the State Council's Leading Group for Poverty Reduction (LGPR) and the central and provincial Poor Area Development Offices (PADO), emphasizes improving the productivity of the poor through investments in upland agriculture, rural infrastructure and rural enterprise development in poor counties. LGPR is the principal advocate of China's rural poor, and is now the key agency responsible for coordinating the nation's Y 15 billion in annual funding for poverty reduction programs. In 1994, LGPR issued a new National Seven-Year (1994-2000) Plan for Poverty Reduction (8-7 Plan) to guide further reductions in poverty. The 8-7 Plan recognizes that the transition and significant reduction of absolute poverty, from large numbers of poor spread widely across the countryside in the late-i 970s to pockets of poverty in remote resource-deficient areas by the mid-1980s, makes it easier and fiscally less burdensome to target increased development and social services assistance to the remaining absolute poor. In near complete agreement with the Bank Group's 1992 report China: Strategies for Reducing Poverty in the 1990s, the 8-7 Plan calls for: (a) institution building and policy reform, including a strengthening of the institutions responsible for implementing explicit poverty alleviation -3- projects and programs, the establishment of an independent and objective poverty monitoring system, the concentration of available funding in the poorest counties (a number of relatively well-off counties and provinces are being "graduated" from the new poverty reduction program); (b) greater investment in the development of human capital, including more central government funding for health, nutrition, education, and relief services in the poorest areas; (c) promotion of labor mobility strategies to encourage the organized flow of low skilled labor from the poor areas to growth pole areas; and, (d) continued investment in poor area agricultural, rural enterprise, road and other rural infrastructure development projects. 6. Project Objectives. The primary objectives of the project are to: (a) demonstrate the effectiveness of a focused rural development project approach to poverty reduction, (b) facilitate a "market-friendly" increase in labor mobility from the poor areas to better- off rural and rapidly growing urban areas, (c) upgrade poverty monitoring at the national and local levels, and (d) significantly reduce absolute poverty in 26 of the very poorest counties in Sichuan, Shaanxi and Ningxia. The project would also stabilize or even reverse upland environmental destruction through land and pasture improvement and soil conservation works, and encourage greater local community participation by enabling households to make key decisions during project design and implementation. 7. Rationale for Bank Group Involvement. The project is consistent with the Country Assistance Strategy discussed by the Board on March 18, 1997 in that it directly addresses two of the Bank Group's top operational priorities in China, namely poverty reduction and environmental protection. Bank Group participation in the project will greatly assist the realization of the Government's 8-7 Plan and it is expected that, if successful, the project will further highlight the potential of the multisectoral approach to the remainder of China's poor areas and the overall poverty reduction program. Bank Group involvement in the project will also play a catalytic function in the establishment of an independent national level poverty monitoring system. In addition, Bank Group participation is helping to focus the project's rural development component toward the development and provision of an integrated package of environmentally sound and farmer- determined technologies for more productive upland agriculture. 8. Concept and Description. Previous Bank Group-supported poverty reduction activities in China include poor area health, education, rural water supply, and numerous agricultural projects and project components. Implementation of these single-sector projects has been successful and has made a very real and sustainable contribution to reducing absolute poverty. The proposed Qinba Mountains Poverty Reduction Project would be a focused, participatory, multisectoral attack on absolute poverty in an extremely resource deficient area, where previous single-sector actions undertaken by the -4- Government have achieved inadequate or unsustainable reductions in poverty. Key components of the project are: (a) upland agriculture (54 percent of project cost), using menus of crop and livestock activities to increase upland agricultural productivity and reverse the trend of environmental degradation through (i) extension of improved agriculture and smallholder livestock management techniques and inputs, (ii) establishment of tree crop nurseries and provision of saplings and tree crop management extension, (iii) intensification of staple crop production on the modest amount of available flat land, (iv) terracing for improved water and soil conservation, and (v) support for the development and extension of applied agricultural technologies; (b) off-farm employment (30 percent of project cost), through (i) a voluntary system of enhanced rural labor mobility for the upland absolute poor, supported by skill training, a computerized demand-driven placement system emphasizing local markets, monitoring of worker safety and resolution of abuses and grievances, and provision of financial resources to cover initial job search costs, and (ii) support for township and village enterprises (TVE) consisting of investment credit for labor-intensive commercially viable agroprocessing, mineral, service and handicraft industries with strong backward linkages to poor households and environmental safeguards meeting national standards; (c) rural infrastructure (11 percent of project cost), through the construction of rural roads, water supply systems, small-scale irrigation, drainage, biogas, and rural electrification; (d) institution building and independent monitoring (4 percent of project cost), by (i) improving LGPR and PADOs' capabilities in project design and implementation, procurement, accounting, and monitoring and evaluation, and (ii) establishing an objective poverty monitoring system by using improved survey instruments to provide a credible and comprehensive poverty profile for the project areas, analyze the accuracy of the targeting of benefits to the absolute poor, and measure and evaluate the impact of the project's individual components; and, (e) microfinance (1 percent of project cost), through a cooperative structure organizing members into five-member voluntary joint liability groups, to provide credit services to poor households for production activities. In addition, two social services programs would be undertaken in parallel with the project. The Qinba Education Program (QEP), supported under the Fourth Basic Education Project (CN-PE-36952) that was presented to the Board in May 1997, would increase the access and quality of primary education provided to the poor through facilities construction, tuition payments, teacher and management training, and the provision of -5- textbooks and instructional equipment. The Qinba Health Program (QHP), to be supported under the Eighth Basic Health Services Project (CN-PE-3566) that is scheduled for Board presentation in FY98, would enhance the availability and delivery of primary and curative health care to the poor through health clinic and township hospital renovation and construction, the establishment of a village health cooperative fund, the strengthening of public health programs in disease prevention and control and for improved maternal and child health, and the enhancement of the management capabilities of health administrators at the county and provincial level. 9. Lessons Learned from Previous Bank Group Operations. The Bank Group's experience with a large number of multisectoral rural-development-cum-poverty-alleviation projects has not been entirely successful in terms of impact or sustainability. An extensive review by the Bank Group's Operations Evaluation Department (OED) of two decades of Bank Group experience with rural development projects documents that the complexity of project implementation and problems with institutional coordination have been the principal causes of mixed results. Recognizing that these institutional difficulties are inherent to multisectoral projects, the OED analysis favors the approach of "implementing separate project components in different ministries as though they were separate projects, but with a coordinating unit located in a nonsector ministry such as Planning or the President's Office" and emphasizes the importance of long-term institution building. The OED report also highlights the importance of (a) strong government commitment to the project and a favorable macroeconomic environment, (b) relying primarily on locally proven technical innovations (the results of research and trials were often not available in time to have an impact on concurrent projects), (c) retaining flexibility in program design during implementation, (d) supplementing the Bank Group's own inputs, during design and supervision, to cover the full range of skills required by a multisectoral project, (e) a comprehensive monitoring and evaluation process, and (f) full community participation. These lessons are fully reflected in the design of the proposed project. In particular, LGPR, which is a nonsectoral office of the State Council, would be responsible for coordinating project design and monitoring implementation. The project also enjoys strong government support and a favorable macroeconomic environment, relies primarily on an integrated package of proven technologies, and would establish a comprehensive monitoring and evaluation process. Community participation has been achieved through a process of detailed consultation in upland communities involving village leaders, village teachers, health practitioners and other members of the community. During project preparation, independent field investigations by two anthropologists led to suggestions regarding community participation, and these were incorporated into overall project design and specific component activities. 10. The proposed project also builds on lessons from recent Bank Group loans to China in the health, education, agriculture and rural infrastructure sectors. For social services, specific lessons include the importance of increasing access to existing rural facilities, improving teacher and health service worker technical skills, establishing reliable financing mechanisms, and upgrading bilingual education in minority areas. In agriculture, the experience of earlier Bank Group-supported projects suggests the need -6- for greater emphasis on crop diversification and marketing in order to avoid the risk of oversupply, and to enhance sustainability by assigning responsibility for project management to existing institutions (suitably strengthened). Since the Bank Group has very little experience with labor mobility projects, the project builds on the early experience of the Southwest Poverty Reduction Project's (SWPRP-CN-PE-3639) labor mobility component, and on lessons from the Ministry of Labor's recent experience in this area and ongoing rural research work. 11. SWPRP has been under implementation for two years and, while careful review and evaluation of the project's individual components can only begin in the latter years of project implementation, enough evidence is already available to support some preliminary lessons. First, the successful implementation of SWPRP during 1995-96 has confirmed that the project's unique organizational and management structure can satisfy the special requirements of its above average complexity and implementation capacity needs. Second, the SWPRP model of poverty reduction represents a significant advance over previous poverty reduction mechanisms in China and is worthy of widespread adoption. Third, it is now clear which components have been most successful. During intensive supervision work during the second half of 1996, an organized exchange between the SWPRP county project management office (PMO) staff in Guangxi confirmed the growing consensus that: the education and health subcomponents and the rural infrastructure component are the activities which are most warmly received by the project's primary beneficiaries; the labor mobility component provides the quickest means of overcoming poverty; the agriculture component's activities require an enormous amount of preparatory work by county- and lower-level project staff; and project supervision and poverty monitoring are the most difficult tasks to complete. The success of the education, health and rural infrastructure activities is closely associated with the fact that project villagers actively plan and implement, and directly and immediately benefit from, these undertakings. Bank Group supervision of the project has confirmed the county PMO staff's views that the project's primary beneficiaries are extremely enthusiastic about the education, health, drinking water, and other rural infrastructure activities, and that labor mobility can quickly lift migrant workers and (through remittances) their families above the poverty line. Supervision missions have also observed the payoff to some successful upland agriculture activities and to effective project supervision and poverty monitoring, but have noted the heavy demands these activities place on county- and lower-level project implementation staff. TVE development is the only SWPRP component that is performing poorly. Measures were taken during the second half of 1996 to overcome the key obstacles of (a) poor prospects for enterprise financial viability and (b) lack of counterpart financing, and it is hoped that the component will move forward quickly during 1997. 12. Implementation. LGPR and its Foreign Capital Project Management Center (FCPMC) have principal responsibility for project design and implementation. A Technical Advisory Group has been set up at the national level to provide technical support to FCPMC and assist the provinces and counties in completing the provincial, -7- county, and subproject feasibility studies. At the provincial level, Project Leading Groups (PLG) have been set up to (a) mobilize institutional, technical and financial resources and support for the preparation and implementation of the project and (b) provide a critical coordination and monitoring function. The PLGs comprise Directors and staff of the provincial PADOs, Planning Commissions and Finance bureaus, the several technical bureaus directly involved in the project (including the Agriculture, Forestry, Water Resources, Labor, TVE, Statistical and other bureaus), the Women's Federation and the Agricultural Development Bank of China. In addition, provincial Project Management Offices (PMO), comprising PADO staff and a number of specialized staff from outside the LGPR system, have been established to ensure effective and timely preparation and implementation of the project. Under the general supervision of the provincial PMOs, the provincial Labor Bureaus would assist with the final preparation and the implementation of the labor mobility component. At the county level, PMOs have been established and have played the lead role in organizing the preparation of the county and subproject feasibility studies. Working closely with the several technical bureaus directly involved in the project and with the township governments and their offices at the administrative village level, the county PMOs would also take the lead role in coordinating project implementation. County PLGs have also been set up to secure coordination among the technical bureaus. 13. Monitoring of Project Performance and Impact. Performance monitoring would include a detailed baseline sample survey with annual follow-up surveys, and monitoring by FCPMC and the three provincial PMOs of a detailed listing of performance indicators. Models for both the survey work and the listing of performance indicators have been established under SWPRP. Throughout implementation, the Bank Group will focus on a subset of about 15 indicators, including: inputs-counterpart funding, and staffing of the provincial- and lower-level PMOs; outputs-elementary school attendance rates, number of treatments provided by village-level healthcare funds, number of upland poor placed in off-farm jobs, kilometers of rural roads built, land area adopting project agricultural activities, and jobs created in project rural enterprises; outcomes-completion rate at sixth grade level, migrant laborers' income levels and remittances, and number of project beneficiaries with improved access to safe drinking water; and impact-infant mortality rate, incidence of absolute poverty in the project areas, knowledge of and access to off-farm employment, and adoption of a focused rural development project approach to poverty reduction in nonproject counties. 14. Costs and Financing. The estimated project cost totals $360 million equivalent, with a foreign exchange component of $108 million equivalent (30 percent). The Bank Group would finance SDR 108.5 million ($150 million equivalent) through the Interim Trust Fund and $30 million through the loan, covering all of the foreign exchange costs and about 30 percent of local costs. The Government of China has selected LIBOR- based US dollar single currency loan terms for the loan in order to facilitate management of the foreign exchange risk of their borrowing by more closely matching the currency of their liabilities with their net trade flows, about 75 percent of which are dollar- denominated. The Borrower selected the LIBOR-based product in order to preserve the -8- full maturity of this loan (compared to the fixed-rate option that would have resulted in a shorter maturity), and judges that it can manage the interest rate risk. To allow rapid startup of work under the project's labor mobility, land and farmer development, and institution-building components, retroactive financing of up to SDR 13 million has been recommended to cover expenditures for these items incurred between February 1, 1997 and the date of signing of the Loan and Interim Fund Credit Agreements. A breakdown of costs and the financing plan are shown in Schedule A. Amounts and methods of procurement, and the disbursement schedule are shown in Schedule B. A timetable of key project processing events is provided in Schedule C. Schedules D and E show the status.of Bank Group operations in China and "China-at-a-Glance" tables. A map is also attached. The Staff Appraisal Report, No. 16390-CHA dated May 15, 1997, is being distributed separately. 15. Sustainability. Based on the development of improved extension services, the selection of a wide range of appropriate crop varieties and livestock breeds, and the improvement of research capabilities that will support project activities, the upland agriculture component is likely to be sustainable. Activities supporting off-farm employment will be sustainable through (a) the emphasis on labor mobility cost-recovery, (b) rural enterprise selection based on commercial viability, and (c) the provision of training to county and provincial Labor Bureau staff. Improved education and health services will be sustainable since the increases in household income levels brought about through the project will be sufficient to allow for the gradual phaseout of the initial subsidies for the recurrent costs under the social services activities. Institutional sustainability is addressed through a comprehensive program of technical assistance, training, and study tours to strengthen existing capacity and ensure development of long- term capabilities. The ability to monitor poverty is sustainable, and will increase over time through the development of enhanced survey instruments. 16. Agreed Actions. The principal assurances obtained from the Borrower at negotiations were that: (a) the education and health programs would be implemented; (b) project farmers would receive exclusive land use rights for a term of not less than 30 years for all lands they plant under the project; (c) labor mobility would be undertaken only on a strictly voluntary basis, and an adequate monitoring and reporting system, focusing on fair treatment of workers and workplace safety, would be finalized and implemented by September 1997; (d) a mid-term review would be undertaken in 1999; and (e) onlending to TVEs and microfinance institutions would be carried out by the provinces in accordance with procedures and on terms and conditions acceptable to the Bank Group. 17. Environmental Aspects. This is a Category B project and, overall, the project is expected to have a favorable environmental impact. In particular, the land and farmer development component focuses on improving productivity through reversing upland environmental destruction. Potential minor environmental issues arise from changes in land use practices, the development of small-scale enterprises, and the construction of rural roads and other small-scale rural infrastructure. The labor mobility component also -9- raises several social issues. An acceptable Environmental Management and Mitigation Plan, which identifies environmental issues and defines necessary mitigation measures, has been prepared. The necessary mitigation measures comprise known and proven engineering and technical solutions, and are covenanted under the project. In addition, the labor mobility component has been subjected to careful social and anthropological review, and an effective monitoring system would be established under the project to guarantee migrant workers' rights and job safety. TVE establishment and expansion, road construction, and other project activities would require acquisition of less than 130 ha of cultivated land and would affect about 2,570 people (though none would lose their homes). An acceptable Resettlement Action Plan has been prepared and its implementation is covenanted under the project. During implementation, the provincial PMOs would have prime responsibility for monitoring resettlement activities. 18. Project Benefits. The project would significantly reduce absolute poverty in 26 of the very poorest counties in western China by increasing the incomes and productivity and improving the health and educational status of about 2.3 million upland poor. It would also demonstrate the effectiveness of a comprehensive rural development project approach to poverty reduction, stabilize or even reverse the environmental destruction of upland areas, upgrade poverty monitoring at the national and local levels, and encourage greater local community participation by enabling households to make key decisions during implementation. 19. Risks. The project addresses problems of chronic absolute poverty and natural resource degradation in an area where previous single-sector interventions have not led to sustainable reductions in poverty. The greatest strength of the project-its focused multisectoral rural development approach-comes at the inherent cost of greater than average complexity and greater difficulties in implementation. This risk was identified prior to the initiation of project preparation, and has been effectively countered by (a) the project's unique organizational and management structure, which features an existing, relatively powerful national network of committed antipoverty agencies, (b) a strong institution and implementation capacity-building program, and (c) the full involvement of the beneficiaries and village communities in the design and implementation of the project. In addition, the project relies on an integrated package of proven technologies and interventions. County-level governments, where leadership required for effective implementation is more sustainable due to the local importance of the project, have extensive experience with these technologies and interventions. 20. Individual components also face specific risks. For the land and farmer development component, there is a risk of slower-than-expected adoption of improved farming practices, resulting in slower realization of economic and environmental benefits. However, the improved techniques would (a) be integrated with existing local farming practices, (b) require limited material inputs, and (c) be introduced, in some cases, on a pilot basis. The project's emphasis on strengthening the extension service through technical assistance and provision of required subject-matter specialists, and training of farmer- technicians and demonstration households is also designed to minimize these risks. The - 10 - project's participatory approach is designed to gain the trust and involvement of beneficiaries and to generate a sense of ownership in project activities. There are significant market risks for several of the cash and economic tree crops, but these risks are considered to be acceptable. Several activities (such as terracing) under the land and farmer development component would directly mitigate the risks of drought. 21. The labor mobility and TVE components face the risks of weak monitoring of worker conditions and sudden changes in market conditions. The China Western Human Resources Development Center, which has already established a highly effective monitoring system under SWPRP, would work with LGPR, the provincial Labor Bureaus and the All-China Women's Federation to monitor and evaluate labor mobility activities. A pilot-phase evaluation would also identify operational issues, and make necessary adjustments. The diversified portfolio of small-scale TVEs has been developed with attention to commercial viability. While specific TVEs face higher demand and price fluctuations (notably silk reeling and tea processing), the majority of products are intended for use in growing local and provincial markets. 22. Recommendation. I am satisfied that the proposed Interim Fund Credit would comply with Resolution No. 184, adopted by the Board of Governors on June 26, 1996, establishing the Interim Trust Fund, and I recommend that the President approve it. Gautam S. Kaji Managing Director Washington, D.C. May 15, 1997 Attachments - 11 - Schedule A CHINA QINBA MOUNTAINS POVERTY REDUCTION PROJECT ESTIMATED COSTS AND FINANCING PLAN ($ Million) Local Foreign Total Estimated Costs Labor Mobility 25.9 11.1 37.0 Rural Infrastructure 21.5 9.2 30.7 Land & Farmer Development 104.7 44.9 149.6 TVE Development 33.1 14.2 47.3 Microfinance 2.2 1.0 3.2 Institution Building & Project Management 5.5 2.3 7.8 Poverty Monitoring 1.4 0.6 2.0 Total Base Cost 194.3 83.3 277.6 Physical Contingency 9.6 4.1 13.7 Price Contingency 48.1 20.6 68.7 Total Project Costs 252.0 108.0 360.0 Financing Plan Interim Trust Fund Credit 60.0 90.0 150.0 IBRD 12.0 18.0 30.0 Provincial Governments 142.0 0.0 142.0 Prefectural and Local Governments 17.0 0.0 17.0 Beneficiaries 21.0 0.0 21.0 Total 252.0 108.0 360.0 Note: Totals may not add up due to rounding. - 12- Schedule B Page 1 CHINA QINBA MOUNTAINS POVERTY REDUCTION PROJECT SUMMARY OF PROPOSED PROCUREMENT ARRANGEMENTS /a ($ million) Procurement Method ICB NCB Others N7 NBGF & Total Civil Works - 27.7 84.9 - 112.6 (9.7) (29.1) (38.8) Crop Establishment - - 37.7 - 37.7 (13.2) (13.2) Livestock Maintenance - - 46.2 - 46.2 (16.2) (16.2) Equipment 2.8 23.9 2.0 0.1 28.6 (2.8) (17.9) (1.5) (0.1) (22.2) Vehicles 5.3 0.3 0.1 - 5.6 (5.3) (0.2) (0.1) (5.5) Construction Materials - - 3.6 - 3.6 (2.7) (2.7) Agricultural Inputs 31.9 - 6.6 - 38.5 (31.9) (5.7) (37.7) Labor Placement - - 43.4 - 43.4 (21.7) (21.7) Microfinance Subloans - - 3.6 - 3.6 (1.8) (1.8) TA, Research & Training - - 11.0 - 11.0 (11.0) (11.0) Management & Supervision - - 10.7 - 10.7 (5.4) (5.4) Other - - 4.3 14.1 18.4 (3.9) (0.0) (3.9) Total 40.0 51.8 254.1 14.1 360.0 (40.0) (27.8) (112.2) (0.0) (180.0) La Figures in parentheses are the respective amounts financed by the Bank Group. / Includes force account, limited international bidding, national shopping, direct purchase, etc. /c Not financed by the Bank Group. - 13 - Schedule B Page 2 DISBURSEMENT CATEGORIES ($ million) Amount Disbursable Category ($ million) Percentage Disbursable Works, Crop Establishment, and 68.1 35% of total expenditure Livestock Maintenance Goods 68.1 100% of foreign expenditure, 100% of local expenditure (ex-factory); 75% for other goods procured locally Labor Training and Placement 21.7 50% of total expenditure Microfinance Subloans 1.8 50% of amounts paid under subloans Consultant Services & Training 13.0 100% of total expenditure Operating Costs 3.4 50% of total expenditure Unallocated 3.9 Total 180.0 ESTIMATED DISBURSEMENT SCHEDULE ($ million) IBRD Fiscal Year 1998 1999 2000 2001 2002 2003 Annual 27.0 36.0 54.0 37.8 21.6 3.6 Cumulative 27.0 63.0 117.0 154.8 176.4 180.0 - 14- Schedule C CHINA QINBA MOUNTAINS POVERTY REDUCTION PROJECT TIMETABLE OF KEY PROJECT PROCESSING EVENTS (a) Time taken to prepare the project: 19 months (October 1995 to April 1997) (b) Prepared by: Central, Provincial and Local Governments, with Bank Group Assistance financed in part by a project preparation grant from the Japan Policy and Human Resource Development Fund (c) First Bank mission: October 1995 (d) Appraisal mission departure: January 1997 (e) Negotiations: April 1997 (f) Planned date of effectiveness: September 1997 (g) List of relevant ICRs: Credit/Loan No. -qject ICR Date PPAR No. Cr. 1733-CHA Red Soils I 02/24/93 12033 Cr. 2611 -COL Health Services Integration 09/30/94 - Cr. 1244-NIC Second Education 12/01/83 This report is based on the findings of identification, preparation, preappraisal, and appraisal missions during the period October 1995 to January 1997. The report was prepared by: Messrs./Mmes. A. Piazza (Economist/Task Manager), M. Goldberg, Julia Li, and S. Liu (Microenterprise, Financial Institutions, and Labor Mobility), E. Liang (Economist), C. Saint-Pierre and B. Trangmar (Agriculture), M. Young and R. Yip (Public Health), C.L. Cheong (Engineer), M. Judd and Z. Lin (Anthropology), N. DeWitt (Legal) and J. Fritz (Environment). Peer reviewers are M. Ravallion (PRDPH), M. Young (HDD), and R. Grimshaw (consultant). The preparation team gratefully acknowledges the strong support of a Japan: Policy and Human Resources Development Fund Grant, without which the preparation of this complex and innovative project would have been extremely difficult. - 15 - Schedule D Page 1 of3 STATUS OF BANK GROUP OPERATIONS IN THE PEOPLE'S REPUBLIC OF CHINA A. STATEMENT OF BANK LOANS AND IDA CREDITS (As of March 31, 1997) Loan/ Amount (US$ million) Credit (net of cancellations) Number FY Borrower Purpose Bank IDA Undisb.(a) 52 loans and 51 credits have been disbursed 5,702.8 3,822.8 - of which SECAL: 2967/1932 88 PRC Rural Sector Adj. 200.0 93.2 - Active Loans 1885 88 PRC Northern Irrigation - 103.0 1.0 2968 88 PRC Railway IV 200.0 - 2.8 1997 89 PRC Shaanxi Prov. Agriculture - 106.0 0.1 2009 89 PRC Integrated Reg. Health - 52.0 0.6 3022 89 PRC Tianjin Light Industry 154.0 - 4.4 3073/2025 89 PRC Shandong Prov. Highway 60.0 (50.0)(b) 6.7 2145 90 PRC National Afforestation - 300.0 6.8 2159 90 PRC Hebei Agricultural Dev. - 150.0 4.0 2172 91 PRC Mid-Yangtze Agricultural Dev. - 64.0 1.4 3265/2182 91 PRC Rural Credit IV 75.0 200.0 0.1 3274/2186 91 PRC Rural Indust Tech (SPARK) 50.0 64.3 2.1 3286/2201 91 PRC Medium-Sized Cities Dev. 79.4 89.0 3.5 2210 91 PRC Key Studies Development - 131.2 7.8 2219 91 PRC Liaoning Urban Infrastructure - 77.8 4.8 2242 91 PRC Henan Agricul. Dev. - 110.0 10.8 3337/2256 91 PRC Irng. Agricul. Intensif. 147.1 187.9 6.0 2294 92 PRC Tarim Basin - 125.0 1.1 2296 92 PRC Shanghai Metro Transport - 60.0 7.8 3406 92 PRC Railways V 330.0 - 33.7 3412/2305 92 PRC Daguangba Multipurpose 30.0 37.0 4.6 2307 92 PRC Guangdong ADP - 162.0 57.0 3415/2312 92 PRC Beijing Environment 45.0 80.0 37.7 2317 92 PRC Infectious and Endemic Disease Cont. - 129.6 71.5 3433 92 PRC Yanshi Thermal Power 180.0 - 1.3 2336 92 PRC Rural Water Supply and Sanitation - 110.0 20.3 2339 92 PRC Educ. Development in Poor Provs. - 130.0 9.5 3443 92 PRC Regional Cement Industry 82.7 - 4.1 3462 92 PRC Zouxian Thermal Power 310.0 - 27.2 3471 92 PRC Zhejiang Provincial Highway 220.0 - 70.1 2387 92 PRC Tianjm Urban Devt. & Envir. - 100.0 46 2391 92 PRC Ship Waste Disposal - 15.0 6.3 2411 93 PRC Sichuan Agricultural Devt. - 147.0 41.5 3515 93 PRC Shuikou Hydroelectric H1 100.0 - 43.9 2423 93 PRC Financial Sector TA - 60.0 43.3 3530 93 PRC Guangdong Provincial Transport 240.0 - 33.1 3531 93 PRC Henan Provincial Transport 120.0 - 19.9 2447 93 PRC Ref. Inst'l and Preinvest. - 50.0 26.3 3552 93 PRC Shanghai Port Rest. and Devt. 124.3 - 10.7 2457 93 PRC Changchun Water Supply & Env. - 120.0 69.8 2462 93 PRC Agriculture Support Services - 115.0 21.2 3560/2463 93 PRC Taihu Basin Flood Control 100.0 100.0 93.8 2471 93 PRC Effective Teaching Services - 100.0 53.5 3572 93 PRC Tianjin Industry II 134.0 - 90.1 3581 93 PRC Railway VI 420.0 - 178.2 3582 93 PRC South Jiangsu Envir. Prot. 250.0 - 50.2 2475 93 PRC Zhejiang Multicities Devt. - 110.0 64.9 3606 93 PRC Tianhuangping Hydroelectric 300.0 - 156.6 3624/2518 93 PRC Grain Distribution 325.0 165.0 435.0 2522 93 PRC Environmental Tech. Assist. - 50.0 24.1 2539 94 PRC Rural Health Workers Devt. - 110.0 63.0 3652 94 PRC Shanghai Metro Transport II 150.0 - 15.6 3681 94 PRC Fujian Provincial Highways 140.0 - 85.6 3687 94 PRC Telecommunications 250.0 - 145.0 2563 94 PRC Second Red Soils Area Devt. - 150.0 54.9 - 16 - Schedule D Page 2 of 3 Loan/ Amount (US$ million) Credit (net of cancellations) Number FY Borrower Purpose Bank IDA Undisb.(a) 2571 94 PRC Songliao Plain Agric. Devt. - 205.0 92.8 3711 94 PRC Shanghai Environment 160.0 - 111.0 3716 94 PRC Sichuan Gas Devt & Conservatn. 255.0 - 176.1 3718 94 PRC Yangzhou Thermal Power 350.0 - 201.8 B103 94 PRC Yangzhou Thermal Power 57.2 - 56.1 3727 94 PRC Xiaolangdi Multipurpose 460.0 - 134.7 2605 94 PRC Xiaolangdi Resettlement - 110.0 59.3 2616 94 PRC Loess Plateau Watershed Devt. - 150.0 67.1 2623 94 PRC Forest Resource Devt. & Prot. - 200.0 132.4 3748 94 PRC National Highway 380.0 - 207.4 3773/2642 95 PRC Ent. Housing/Soc See Reform 275.0 75.0 287.0 3781 95 PRC Liaoning Environment 110.0 - 84.0 3787 95 PRC Xinjiang Prov. Highways 150.0 - 101.4 2651 95 PRC Basic Ed for Poor/Minorities - 100.0 46.0 3788 95 PRC Shenyang Industrial Reform 175.0 - 145.8 2654 95 PRC Economic Law Reform - 10.0 7.8 2655 95 PRC Comp Maternal/Child Health - 90.0 46.7 3846 95 PRC Zhejiang Power Development 400.0 - 361.4 B105 95 PRC Zhejiang Power Development 64.3 - 61.5 3847 95 PRC Technology Development 200.0 - 195.0 3848 95 PRC Sichuan Power Transmission 270.0 - 262.3 3873/2709 95 PRC Fiscal TA 25.0 25.0 43.2 3874/2710 95 PRC Yangtze Basin Water Res Devt 100.0 110.0 98.2 3897 95 PRC Railway VII 400.0 - 400.0 3906/2744 95 PRC Southwest Poverty Reduction 47 5 200.0 173.2 3910 95 PRC Inland Waterways 210.0 - 184.4 3914/2756 95 PRC Iodine Deficiency Dis. Control 7.0 20.0 21.8 3929 96 PRC Shanghai-Zhejiang Highway 260.0 - 193.8 3933 96 PRC Ertan II Hydroelectric 400.0 - 137.7 B106 96 PRC Ertan II Hydroelectric 50.0 - 48.3 2794 96 PRC Disease Prevention - 100.0 87.2 3966/2799 96 PRC Hubei Urban Environment 125.0 25.0 142.2 3967/2800 96 PRC Labor Market Development 10.0 20.0 26.6 3980 96 PRC Henan (Qinbei) Thermal (c) 440.0 - 440.0 3986 96 PRC Second Shaanxi Prov. Highways 210.0 - 200.0 3987 96 PRC Second Shanghai Sewerage 250.0 - 248.0 2831 96 PRC Third Basic Education - 100.0 73.2 2834 96 PRC Shanxi Poverty Alleviation - 100.0 78.6 4001 96 PRC Animal Feed 150.0 - 150.0 4027 96 PRC Second Henan Prov. Highway 210.0 - 210.0 4028/2870 96 PRC Gansu Hexi Corridor 60.0 90.0 137.4 4044/2886 96 PRC Seeds Sector Commercialization 80.0 20.0 96.7 4045 96 PRC Chongqing Ind. Pollution Control 170.0 - 170.0 4055/2892 96 PRC Yunnan Environment 125.0 25.0 149.0 4063/2898 97 PRC Vocational Education Reform 10.0 20.0 19.1 4099 97 PRC Second Xinjiang Highway (c) 300.0 - 300.0 4124 97 PRC Second National Highway (c) 400.0 - 400.0 Total 8,913.6 9,452.5 17,090.8 of which has been repaid 1,711.1 53.8 Total now held by Bank and IDA (a) 15,379.7 8,859.8 Amount sold: Of which repaid - - Total Undisbursed 7,549.3 1,903.2 9,452.5 (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 and total credit amount held indicate a dollar amount greater than the original principal credit amount expressed in dollars. (b) Fully disbursed. (c) Not yet effective. - 17- Schedule D Page 3 of 3 B. STATEMENTOF IFC's COMMITTED AND DISBURSED PORTFOLIO (As of March 31, 1997, in US$ million) Committed Disbursed FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1985 Guangzhou Auto 1 88 3.23 0.00 0.00 1.88 3.23 0.00 - 0.00 1987 China Bicycles 000 0 00 0.00 0.00 0.00 0.00 0.00 000 1988 Crown Elec 209 000 0.00 0.00 2.09 0.00 0.00 0 00 1992 China Bicycles 8.50 2.44 0.00 0.00 8.50 2.44 0.00 0.00 1992 Guangzhou Auto 0.00 1.32 0.00 0.00 0.00 1.32 0.00 0.00 1993 Shenzhen PCCP 3.76 .99 0.00 0.00 3.76 99 0.00 0.00 1993 Yantai Cement 17.69 1.95 0.00 9.44 17.69 1.95 0.00 9.44 1994 China Bicycles 0.00 .95 000 0.00 0.00 .95 0.00 000 1994 China Walden JV 0.00 7.50 000 0.00 0.00 3.79 0.00 0 00 1994 Dalian Glass 20.50 2.40 0.00 40 50 20 50 2.40 0.00 40.50 1994 Dynamic Fund 0.00 12.35 0.00 0.00 0.00 9.46 0.00 0.00 1994 China Walden Mgt 0.00 .01 0.00 0.00 0.00 .01 0.00 0.00 1994 Plant. Timber 1000 1.00 0.00 20.00 10.00 1.00 0.00 20.00 1995 Dupont Suzhou 24.92 3.85 0.00 52.00 11.34 3.85 0.00 23.12 1995 Nantong Wanfu 5.63 2.41 0.00 0.00 0.00 0.00 0.00 0.00 1995 Newbridge Inv. 0.00 10.00 0.00 0.00 0.00 5.04 0.00 0.00 1995 Suzhou PVC 0.00 2.48 0.00 0.00 0 00 2.48 0.00 0.00 1996 Beijing Hormel 5.00 .50 0.00 5 50 1.00 .50 0.00 0.00 1996 Fairyoung Ports 0.00 4.98 0.00 0 00 000 498 0.00 0.00 1996 Jingyang 40.00 0.00 0.00 100.00 18.57 000 0.00 46.43 1996 Nanjing Kumho 16.00 3 81 000 45.50 759 3.81 0.00 21.57 1996 Weihai Weidongri 4 32 0.00 0 00 000 0.00 0.00 0.00 0.00 Pending Commitments 1996 * CALTEX OCEAN 31.33 000 0.00 66.00 1996 * NANJING HUINING 4.00 0.00 0.00 0.00 1997 * NINGBO 0.00 2.00 0.00 0 00 1996 * SHANDONG SAND 17.00 0.00 000 25.00 1995 * SUZHOU PVC 14.10 0.00 0.00 15.80 1996 * TIANJIN 9.10 0.00 0.00 9.10 1996 * TIANJIN KUMHO 23.50 0.00 3.00 47.00 1996 * XIAMEN XIAN 10.00 0.00 0.00 0.00 - 18 - Schedule E Page 1 of 2 China at a glance POVERTY and SOCIAL East Low- China Asia income Development diamond' Population mid-1995 (millions) 1,211 2 1,709 3,188 GNP per capita 1995 (USS) 620 830 460 Life expectancy GNP 1995 (billions US$) 751 0 1,418 1,466 Average annual growth, 1990-95 Population (%) 12 13 18 Labor force {% 11 14 18 GNP Gross Most recent estimate (latest year available since 1989) pirta enrimant Poverty headcount index (% of population) 11 Urban population (% of total population) 30 31 29 Life expectancy at birth (years) 69 68 63 Infant mortality (per 1,000 Ave births) 29 36 58 Child malnutrition (% ofchildren under 5) 17 17 38 Access to safe water Access to safe water (% ofpopulation) 83 77 75 Illiteracy (% of population age 15+) 19 17 34 Gross primary enrollment (% of school-age population) 118 117 105 Male 120 120 112 - Chma Low-mcome group Female 116 116 98 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1975 1985 1994 1995 Economic ratios* GDP (billions US$) 160 3 304 9 540 9 697 6 Gross domestic investment/GDP 30 3 37 8 39 9 40 5 Exports of goods and non-factor services/GDP 5 2 9.9 22 0 21.0 Openness of economy Gross domestic savings/GDP 306 337 41.2 420 Gross national savings/GDP 30 6 34.0 41 2 40 5 Current account balance/GDP -0 2 -39 13 02 Interest payments/GDP . 0 2 07 07 Savings >--Investment Total debt/GDP 55 186 169 Total debt service/exports 8 3 8 9 9.9 Present value of debt/GDP . 158 Present value of debt/exports 68 5 Indebtedness 1975-84 1985-95 1994 1995 1996-04 (average annual growth) GOP 77 96 126 105 8.5 Chma - Low-mcome group GNP per capita 7.1 8 0 11 3 7.9 7 6Chn-Lwicm gou Exports of goods and nfs 179 133 28.1 96 85 STRUCTURE of the ECONOM 1975 1985 1994 1995 Growth rates of output and investment (%) (%6 of GDP) Agnculture 320 284 203 206 Industry 428 431 480 48 4 2o Manufactunng 31 6 35 4 37 6 37 6 is Services 25 2 285 31.7 31.1 1o 5 Pnvate consumption 61 9 53 1 459 45.7 o 9o 92 93 94 9s General government consumption 7.6 13.2 128 122 Imports of goods and non-factor services 50 14.0 206 194 - GDI ---GDP (average annual growth) 1975-84 1985-95 1994 1995 Growth rates of exports and Imports (%) Agnculture 51 4 2 40 50 40 Industry 100 12.8 184 14.1 30 Manufacturing 131 12.3 184 13.3 20 Services 8 8 9.4 93 79 10 Pnvate consumption 73 83 97 63 0 General government consumption 8.5 9 5 7.8 -o 91 92 93 94 95 Gross domestic investment 8 9 9 7 10.5 19.1 -20 Imports of goods and non-factor services 21 1 9 0 9.3 5 0 Gross national product 85 95 126 90 -Exports -mports Note 1995 data are preliminary estimates The diamonds show four key indicators in the country (in bold) compared with Its income-group average If data are missing, the diamond will be incomplete - 19- Schedule E Page 2 of 2 China PRICES and GOVERNMENT FINANCE Domestic prices 1975 1985 1994 1995(%) (% change) 25 Consumer pnces 02 93 24.1 17 1 20 Implicit GDP deflator -09 101 19.5 13.1 i 10 Government finance 5 - (% of GDP) o Current revenue . 25.5 120 116 90 91 92 93 94 9S Current budget balance . 67 0.4 0.4 GDPdef CPI Overall surplusideficit -05 -1 6 -1 6 -aO e -- P TRADE (millions US$) 1975 1985 1994 1995 Export and Import levels (mill. US$) Total exports (fob) 27.350 121.006 148,770 1s0.oc Food 3,803 10,015 9,954 140,00 Fuel 7,132 4,069 5,335 12oooo Manufactures 13,522 101,298 127,283 ioo,ooo Total imports (cif) .. 42,252 115,614 132,078 so,000 Food . 1,881 5,014 9,126 ea0o o 0 Fuel and energy . 172 4,035 5,127 200:: Capital goods .. 18,694 55,624 57,481 oin . . _ Export price index (1987=100) 92 123 133 89 90 91 92 93 94 95 Import pnce index (1987=100) 78 122 132 o Exports n imports Terms of trade (1987=100) 118 101 101 BALANCE of PAYMENTS (millions US$) 1975 1985 1994 1995 Current accountbalance to GDP ratio (%) Exports of goods and non-factor services 7,828 28,163 118,811 142,000 4 T Imports of goods and non-factor services 8,097 41,149 111,472 127,600 Resource balance -269 -12,986 7,339 14,400 2 Net factor income 0 932 -1,018 -14,300 Net current transfers 0 171 836 724 1 Current account balance, 0 99 go 91 92 93 94 95 before official transfers -269 -11,883 7,157 824 -1 Financing items (net) 9,443 23,370 21,376 -2 Changes in net reserves .. 2,440 -30,527 -22,200 Memo: Reserves including gold (mill US) 13,214 53,560 75,760 Conversion rate (locaVlUS$) 1 9 2 9 8.6 84 EXTERNAL DEBT and RESOURCE FLOWS 1975 1985 1994 1995 (millions US$) Composition of total debt, 1995 (mill. US$) Total debt outstanding and disbursed 0 16,696 100,457 118,090 IBRD 0 498 5,933 7,209 IDA 0 431 6,097 7,038 A 7209 G 22325 B 7038 Total debt service 0 2,478 11,135 15,065 IBRD 0 26 679 810 D 2055 IDA 0 4 50 63 E 19980 Composition of net resource flows Official grants 0 117 337 326 Official creditors 0 1,117 3,121 7,203 Private creditors 0 2,867 6,690 5,683 Foreign direct investment 0 1,659 33,787 38,000 Portfolio equity 0 0 3,915 2,807 F 59483 World Bank program Commitments 0 1,092 4,020 2,850 A - IBRD E - Bilateral Disbursements 0 565 2,063 2,269 B - IDA D - Other multilateral F - Pnvate Principal repayments 0 0 324 364 C - IMF G - Short-term Net flows 0 565 1,739 1,905 Interest payments 0 29 405 509 Net transfers 0 536 1,334 1,396 International Economics Department 12/6/96 Note The dollar estimate for China's GNP per capita is taken from the World Development Indicators and is a preliminary figure based on an on-going World Bank study of China's GDP It was calculated to facilitate inter-country comparisons. Official statistics are used as the basis for all other economic analysis contained in this document 4 MAP SECTI  ，닌 긔 …；