China: World Bank to Support Infrastructure Development for Industry Relocation

June 20, 2013

WASHINGTON, June 20, 2013 – Today the World Bank’s Board of Executive Directors approved a loan of US$150 million to the People’s Republic of China to support the development of the Xuancheng Economic and Technological Development Zone and prepare it for industrial relocation.

China’s rapid industrialization has been mainly concentrated in southern coastal provinces since 1978. In recent years, however, rapidly rising costs of the factors of production in the coastal provinces have forced many manufacturing firms to move inland or overseas. This creates an opportunity for the middle and western regions to capture some of the regional transfer of industry. The Wanjiang City Belt was designated as the first national-level demonstration zone for industrial relocation. Geographically situated at the nearest point in Wanjiang to the Yangtze River Delta, Xuancheng is a good location for industrial relocation from the coast. And the Xuancheng Economic and Technological Development Zone is the primary vehicle for the city to carry out its industrial relocation efforts.

The Anhui Xuancheng Infrastructure for Industry Relocation Project will assist in the development of the Xuancheng Economic and Technological Development Zone, especially in adopting a more holistic design approach, leveraging the latest international best practices, and introducing innovative measures, particularly for capacity building and institutional strengthening. It will be developed as a demonstration project for the national government to showcase to other inland cities.

“The project will help address the challenges that industrial zones in China face today by bringing value-added in the areas such as the clustering effect, environmental performance and urban-zone integration. For example, the project will support greener growth by promoting sustainable environmental practices through efficient energy usage, construction of greener buildings, integrated transport systems, and other environmentally conscious infrastructure development with real time environmental monitoring,” said Suhail Jme’an, World Bank’s Senior Water and Sanitation Specialist. “By bringing in global expertise and good practices, we hope this project can greatly improve the effectiveness and impact of this relocation zone, and set a good example not only for China, but also for other developing countries.”

Specifically the project will finance infrastructure investments in the project area including construction of roads and bridges with underground storm-water drainage, water supply and sewerage networks; construction of a wastewater treatment plant, associated conveyance sewers and treated effluent pipes and treated effluent outfalls, and support for the operation and maintenance of sub-surface infrastructure services; as well as institutional development and capacity building.

The total project cost is estimated to be more than US$343 million, with the IBRD loan of US$150 million to finance 44 percent.

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Li Li
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