Wonders never cease. The World Bank has approved loans for a railway project in China and a water quality improvement project in Shanghai. Both loans have a worth of $300 mln and $200 mln, respectively.
The NanGuang Railway Project thus benefits from $300 mln loan, with maturity 25, and a grace period of 5 years. Here is the World Banks description of the project.
The NanGuang Railway Project aims to provide additional transport capacity and reduce transport time between China’s less developed southwest region and the relatively more developed Pearl River Delta region by connecting the existing railway networks in these two regions. Specifically the loan will finance the construction of about 400 km of double track electrified railway from Litang West Station (about 95 km northeast of Nanning) to New Zhaoqing Station in Guangdong province; and partially finance 62 km of four-track railway being constructed between New Zhaoqing Station and Sanyanqiao Station (near Guangzhou). The World Bank will provide international experience and advice in the process. This important project is part of the China’s economic stimulus program in response to the global economic crisis. “The NanGuang Railway project will not only support further regional economic development by connecting the prosperous coastal region to the interior,” said John Scales, Transport Coordinator from the World Bank Office, Beijing. “But it also provides a platform for the continued high-level engagement that began 25 years ago between the Bank and the Chinese Government on railway development, while simultaneously supporting operational development of the Chinese railway network.”
In addition, the Worldbank also finances $200 for the Shanghai Urban Environment Project:
The Shanghai Urban Environment Project, the third phase of the Bank’s Adaptable Program Loan (APL) started in 2003, will focus on increasing the secure provision of good quality water, reducing pollution load discharged without treatment into water sources, and facilitating sustainable investments in environmental infrastructure in suburban areas of Shanghai Municipality. Through the first two phases, the Bank supported several key infrastructure investments and institutional and policy reforms in the water, wastewater, and solid waste sectors. The new US$200 million loan will finance the construction of infrastructure projects such as Nanhui Raw Water Conveyor and Puxi Trunk Sewer, further contributing to Shanghai’s goal of building a resource-efficient and environmentally sustainable city and hosting a successful “World Expo 2010: Better City – Better Life”.
How generous. The Chinese sit on dollar reserves of some $ 2 trillion, get criticized by the same World Bank for their protectionism, but they still get a credit from the World Bank.
As the Neue Zürcher Zeitung writes:
In fiscal year 2008 the Organization [WorldBank], which purports to fight poverty, gave loans worth $1.5 bln to the Middle Kingdom, which equaled around 6% of total loans given. According to the World Bank, the goal of these loans is to further Chinas Integration into the world economy. Questionable, however, is that with the scarcity of resources they are giving money to a government, which can at any time afford to spend tens of billions on infrastructure projects to stimulate internal demand.
I agree. Zoellick is an ex-Goldman Sachsie. Goldman Sachs is very fond of China. China is a command economy that can force projects throught without regard to people’s wishes, which corporations in general, and banks in particular, adore very much.
So if you want to prove that the Chinese economic and societal model is superior to everything else, what do you do?
Well, you make them succeed at any cost, and see to it that all others fail. Oops, sorry I think I have to adjust my tin-foil hat, it’s not working properly today.