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World Bank to support China in exploring innovative approaches in poverty reduction

October 20, 2010

BEIJING, October 20, 2010: A new World Bank-supported poverty reduction project – the Sustainable Development in Poor Rural Areas Project – was officially launched at a workshop jointly held by the World Bank and the State Council Leading Group Office on Poverty Alleviation and Development of China, and witnessed by representatives of the State Development and Reform Commission and Ministry of Finance, and about 200 participants from the three project provinces.
“The World Bank has worked with the China in poverty alleviation since the mid 1990s and has been successful in assisting the country in its efforts to reduce poverty. With Bank support, China has recently also began to experiment with CDD (community-driven development) approaches and has implemented its own pilots on CDD and it has developed substantial experience with participation approaches,” said Inger Andersen, World Bank Vice President for Sustainable Development in her opening remarks.


“Particularly relevant lessons from these pilots have been that the devolution of decision making to the village level, decentralized project implementation, and the control of project funds are key factors that can substantially increase the effectiveness of public funding. The participatory and CDD approaches are well in line with the Government commitment to greater local autonomy and community participation in development activities,” she added.

This is the fifth direct poverty reduction project supported by the World Bank in China over the last 15 years, built on the success of the Southwest Poverty Reduction Project approved in 1995, Qinba Mountains Poverty Reduction Project approved in 1997, Gansu and Mongolia Poverty Reduction Project approved in 1999, and Poor Rural Communities Development Project approved in 2005.

With a total investment of about US$160 million including a US$100 million loan from the World Bank, a US$5 million grant from the Global Environment Facility (GEF) and about US$55 million of domestic counterpart funding, the Poverty V project covers 25 poorest counties in Henan and Shaanxi Provinces and Chongqing Municipality.

The new project will adopt the international best practices of the CDD approach by promoting the active involvement of villagers in rural community development processes, enabling them to collectively identify and prioritize local needs, prepare and select local subprojects in a fair, equitable and transparent manner, and develop their own collective capacities for implementation, project management, monitoring and maintenance.

Upon its completion by 2015, 120,000 poor rural households with a total population of 480,000 are expected to have benefited from the project through new or improved village access roads, drinking water supply, rural sanitation, electrification and communication infrastructure, school buildings, water storage, irrigation and drainage systems, and land improvements. Vocational and other training will help expand their access to off-farm employment.

Fan Xiaojian, Director-General of the State Council Leading Group Office on Poverty Alleviation and Development, noted in his remarks that the Chinese Government is developing a set of new Guidelines for Poverty Alleviation and Development in Rural China for 2011-2020. “In the new period, we will continue to expand our international collaboration in the area of poverty reduction and further improve China’s poverty alleviation policy and strategy. In this project, we are working with the World Bank to explore innovative ways with a focus on future poverty reduction,” he said.