This year marks the 30th anniversary of the historic China-World Bank Group partnership – a partnership that has seen one of the most successful engagements of the World Bank Group and has contributed to shaping China’s modernization and development.
In April 1980, when Vice Premier Deng Xiaoping first met the then-President of the World Bank, Robert McNamara, Deng described his vision of China at the turn of the millennium: an open and rapidly growing economy with a per capita income fourfold higher, well on its way to achieving middle-income levels by the mid-21st century. For his part, McNamara committed to providing the Bank’s best talent to support China on this mission. In so doing, he hoped that the World Bank would become one of China’s most important development partners. Both leaders had to overcome resistance and skeptics.
Looking at China now and the important role it plays in the global economy, I am delighted that both their visions were realized.
Like all enduring ties, the China-World Bank partnership has evolved with the changing times. In the early years, the World Bank could bring global knowledge to China – how to appraise and implement priority projects; how to encourage innovation and introduce new technologies; how to develop institutions and policy instruments needed for good economic management.
Later, the learning became more mutual as success with reform, growth and overcoming poverty gathered pace. Over the last three decades, growth in China has averaged 10 percent a year, the poverty rate has fallen from 65 percent to 10 percent, all the Millennium Development Goals have been reached or are within reach, and the economy is likely to become the second largest in the world this year.
These are achievements of enormous magnitude for any country, let alone one with the size and diversity of China. They have not only benefited China but the East Asia region more widely and indeed the world. China’s efforts alone have ensured that the world’s Millennium Development Goal on overcoming poverty will be met. It is now the World Bank that can draw from China’s experience – whether in infrastructure, education, rural development, forestry or energy – and employ this knowledge with other countries to overcome poverty in the world.
One way the World Bank is doing so is by facilitating and supporting an active program of knowledge exchange between China and other developing countries that wish to learn from China’s development success and its record in overcoming poverty. I am pleased to observe that China has been generous in sharing its experiences and lessons from its development successes with its neighbors in East Asia and in less fortunate regions such as Sub-Saharan Africa.
China’s rapid growth and domestic transformation over the last three decades have reshaped the domestic as well as the global economy.
With the domestic economy, China is wisely addressing new challenges. These include creating a greater balance between savings and consumption, creating a Harmonious Society that will benefit all its people, seeking to avoid “The Middle Income Trap” that could curb prosperity, and moving to more value-added production that will warrant higher wages. In each of these areas, the World Bank may be able to assist in sharing knowledge and experience. We also believe that the lessons we learn together will be of interest to other developing countries.
In the global economy, China is altering the division of labor, affecting capital flows, and creating new growth opportunities in other developing countries. This expanding influence in the world – including its recent elevation to being the third largest shareholder of the World Bank – will come with new responsibilities, opportunities and expectations. China will need to weigh how it can best contribute as a responsible stakeholder in the international system that has benefitted China in the past and will offer cooperative opportunities in the future. China’s influence will be felt in designing effective climate change policies, ensuring stable global growth, and providing development resources and investment to overcome poverty in other countries.
Looking ahead, the World Bank will continue to work with China as it faces these challenges. China’s quest now is to join the ranks of the high income countries. I believe that it can do so over the next generation while also protecting its environment and natural resources, enhancing social stability, and protecting the global commons. This is a demanding goal, but one that I am confident can be reached. China has already accomplished a great deal and earned the world’s respect. The World Bank Group will be proud to play a constructive and supportive role with our extraordinary partner.