China and the World Bank

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China did not become involved with the World Bank group until 1980. Since its entry into the World Bank, China has made significant contributions to the World Bank while also borrowing from the bank to finance various projects within its territory. As a rising major power, China struggles to obtain appropriate voting power within the World Bank. Because of this, China and other BRICs nations formed its own development bank called the New Development Bank in 2014.[1]

History[edit]

China Joining the World Bank[edit]

The People's Republic of China (PRC) did not join the IMF and the World Bank until April 1980.[2] Prior to that, the Republic of China represented China in these two financial institutions. The Republic of China originally joined the IBRD on December 27, 1945.[3] However, PRC replaced ROC position in 1980 as China. After PRC joins the World Bank, the country initially receives approval of its first project loan approval in 1981.[4] In 1989, the World Bank suspended nearly one year of its loan to China as a response to the Tiananmen Square Incident for China's repression of and use of lethal violence towards student protests.[4] In addition to receiving loans for projects, the World Bank has played an important role in advising China on its economic reform policies introduced back in the 1980s.[4] With the continuous growth of China's economy, China was able to gain more voting powers in 2010 as some developed countries gave up some of their powers to emerging countries.[2]

Project in China[edit]

Up until June 2017, there is a total of 101 projects still ongoing in China that are funded using World Bank loans.[5] These projects have primarily focused on financing technical assistance such as pension reform, urban housing reform, energy market reform, environmental protection, labor market development, social safety net development, interest rate liberalization and external trade liberalization.[2] After being classified as a middle-income country by the World Bank, China then gained access to borrowing from the International Bank for Reconstruction and Development (IBRD). From 1999 until 2011, China borrowed near $40 billion from the IBRD.[2] Until 2011, China also received over $5 billion in funding for 220 private sector projects from the International Finance Corporation (IFC).

Controversies of World Bank Projects[edit]

One notorious World Bank project that was highly controversial was the Gansu and Inner Mongolia Poverty Reduction Project back in 1999. This project included a 40-meter dam that projected to displace around 60,000 inhabitants within Qinghai Province. This led to the World Bank ruling to withdraw funding for this section of the project to stop this controversial debate.[2] In the year 2000, the World Bank also stopped the China Western Poverty Reduction project that was originally going to resettle over 58,000 Chinese farmers into Tibet. After reports were released by inspection panel, the project was forced to be withdrawn because reports indicated that the World Bank violated social and environmental policies.[6]

References[edit]

  1. ^ "History - New Development Bank". New Development Bank. Retrieved 2017-06-13.
  2. ^ a b c d e "China and the World Bank - Bretton Woods Project". Bretton Woods Project. 2011-09-14. Retrieved 2017-06-06.
  3. ^ "Member Countries". www.worldbank.org. Retrieved 2017-06-06.
  4. ^ a b c Economy, Elizabeth (1999). China Joins the World: Progress and Prospects. Council on Foreign Relations. pp. 208–210.
  5. ^ "Global Reach Map". maps.worldbank.org. Retrieved 2017-06-06.
  6. ^ "www.ciel.org/news/victory-world-bank-effort-to-support-chinas-population-transfer-into-tibet-is-defeated/". www.ciel.org. Retrieved 2017-06-06.