[Reuters]

Published date: 18th Apr 1988

18 April 1988

Reuters News

English

(c) 1988 Reuters Limited

MANILA, April 18, Reuter – China is negotiating with the Manila-based Asian Development Bank for six loans this year, a Chinese official said on Monday. Li Dongqun, alternate executive director on the ADB board, told Reuters in an interview that Peking wanted to move slowly in building up its borrowings. China joined the ADB in 1986 and is the bank’s newest member. The bank made its first loans to Peking in1987. “I think we should go step by step,” Li said. ADB loans to China began last year with 100 million dollars to the China Investment Bank and 33.3 million dollars for a project supporting Peking’s policy of switching to coal from oil for power generation. The loans become effective this year. “I think for the first year this is quite good,” Li said. Bank papers show four loans totaling 286.2 million dollars are under current consideration. They include a 110 million dollar iron and steel modernisation project, the 86.2 million dollar foreign-exchange component of a 137.2 million dollar Tyre project, a 40 million dollar chemical plant expansion and a 40 million dollar pulp mill project. Li said two other loans, for the Shanghai Investment and Trust Corporation and an area development project in Shanxi province, are also being discussed with the bank. He gave no figures. Peking has said it will borrow only ordinary capital funds at normal rates of interest and not seek loans from the Asian Development Fund, the bank’s concessional window. The declaration recognises the fears of smaller nations in the 47-member ADB that China and India, which first borrowed from the bank in 1986, could swamp their own development needs. Li said four professional staff members from China had already joined the ADB and more were being recruited. Peking will host the ADB’s 22nd annual meeting in April next year. At last year’s meeting in Osaka, China became only the third country after the United States and Japan to occupy a separate seat on the bank’s 12-member board. Li said Peking welcomed news that Taiwan, which the bank calls “Taipei, China”, would end a two-year boycott to attend the ADB’s annual meeting later this month in Manila. It will be the first time both have attended the same monetary conference. He said Peking would cooperate with Taiwan within the bank. Li made it clear China would not support calls by the United States and other major ADB donors for the bank to link more loans to policy reforms by its members. “The government itself should decide what kind of policy to adopt,” he said. “The ADB can share the experience it has gained with other countries. “It cannot be forcible or compulsory to adopt policy measures. Each country knows its background, its situation.”