ADB's Work in the PRC

The economic growth of the People’s Republic of China (PRC) in 2021 was driven by dynamic exports, industrial production, and the improved performance of services and consumption, boosting the labor market and decreasing unemployment to pre-pandemic levels. In March 2021, the National People’s Congress approved the country’s 14th Five-Year Plan, which aims at achieving higher-quality development that is more efficient, equitable, sustainable, and secure by 2025.

ADB has been working with the PRC since 1986. In 2021, ADB approved the new country partnership strategy (CPS) for the PRC for 2021–2025 with the overarching goal of supporting the country to achieve high-quality, green development. It focuses on three interrelated strategic priorities: environmentally sustainable development, climate change adaptation and mitigation, and addressing an aging society and health security.

To date, ADB has committed 1,160 public sector loans, grants, and technical assistance totaling $41.3 billion to the PRC. Cumulative loan and grant disbursements to the PRC amount to $34.18 billion. These were financed by regular ordinary capital resources, and other special funds. ADB’s ongoing sovereign portfolio in the PRC includes 83 loans worth $13 billion.

In 2021, ADB committed $1.62 billion for 10 sovereign loans (excluding cofinancing) and $145 million for 4 nonsovereign loans for the PRC. This was supplemented by $9.7 million (inclusive of cofinancing) for 25 technical assistance (TA) projects (inclusive of supplementary TAs).

ADB supported ecological protection and holistic development of the Yangtze River Economic Belt with the commitment of $153.98 million in Hunan province to restore wetland areas and establish flood early warning systems benefiting 523,000 people in Pingjiang county. Another $200.52 million loan was committed to improve agricultural incomes and enhance food security benefiting 422,022 residents. ADB also committed $197.8 million in Henan’s Xichuan county for early warning systems for floods.

ADB reinforced government action on air pollution reduction in the greater Beijing–Tianjin–Hebei region, by committing $151.51 million to boost sustainable financing in renewable energy, clean transport, industrial energy efficiency, and cooling system retrofits. ADB, in partnership with KfW, also supported livable and inclusive cities through integrated information and communication technology with a $200 million loan in Shaanxi province.

ADB committed a $146.11 million results-based lending program to create skilled jobs for women as teachers, expand their access to different in-service training, and promote leadership roles for women. ADB also committed a $140.78 million loan to strengthen health care services for the elderly in the Xiangyang municipality of Hubei.

Nonsovereign operations. ADB also supported women’s access to affordable energy through a $50 million equivalent nonsovereign loan to natural gas supplier Henan Tian Lun Gas Group Ltd. At least 8,700 households headed by single mothers will receive supplies of natural gas on favorable payment terms under the project.

Total outstanding balances and undisbursed commitments of ADB’s nonsovereign transactions in the PRC as of 31 December 2021 was $1.84 billion representing 13.08% of ADB’s total private sector portfolio.

Operational challenges. As most ADB operations target the PRC’s less-developed regions, operational challenges persist where overall institutional capacity and policies are weaker, and an increasing number of projects are implemented by the lower level of municipality and county governments that have limited experience with ADB procedures. Such challenges may get aggravated since future ADB operations in the country are required to demonstrate strong innovative features and knowledge spillover potentials and focus more on institutional strengthening rather than traditional investments that emphasize civil works.

COVID-19 Response

To assist rural farmers and microentrepreneurs hit hard by the COVID-19 pandemic, ADB provided a $40 million equivalent nonsovereign loan to CD Finance Management Co. Ltd. to expand access to microfinance loans for underserved groups in the rural areas. ADB is also providing a $60 million equivalent nonsovereign loan to Zhujiang Financial Leasing Company Limited to help the PRC’s small and medium-sized enterprises recover from the pandemic.

Knowledge Work

Knowledge is central to ADB’s operations in the PRC, with a focus on enhancing institutional capacity to strengthen service delivery for inclusive and environmentally sustainable development. ADB launched the report on Greening Development in the People’s Republic of China as a side event at the UN Biodiversity Conference (CBD COP15), showcasing the dynamic partnership of the PRC and ADB in environmental protection and ecological conservation. ADB also committed a flagship TA cluster to support the resilient ecological protection and high-quality development goals in the Yellow River Basin.

ADB continued providing policy advice through a $300,000 technical assistance on the alignment of the PRC’s current tax structure with the country’s expenditure needs under a high-quality growth model and through timely observations and suggestions on high-quality development and population aging. ADB also published a brief on the PRC’s response to the COVID-19 pandemic.