World Bank to lend China $400 mil. for railway, expressway projects

Asian Economic News, June 28, 2004

BEIJING, June 25 Kyodo

The World Bank said Friday it has approved two loans, each worth

$200 million, to China for the construction of a railway and an expressway, both designed to help economic development in western China by connecting it to the east.

One loan will cover a line from Zhejiang Province south of Shanghai to Hunan Province in the northwest, and the other will help fund the Hubei-Shiman Expressway in northwestern Hubei Province, the bank said in a statement.

The railway, the only one connecting Shanghai to points west along the Yangtze River and into Yunnan Province, will get faster trains of up to 200 kilometers per hour and track upgrades that can hold heavier freight trains. Work is expected to be done in 2008.

The highway improvements, also due by 2008, will cut food transportation times and increase traffic safety.

Both projects should help western China catch up with eastern China, the bank statement said. Per capita income in China's 12 central and western provinces is less than half of that of coastal provinces. Nationwide, the average is 2,639 yuan (about $320) per month.

''Despite China's accomplishments in reducing poverty in the past 20 years, economic growth has not been equally distributed among China's regions,'' the statement said. ''Both infrastructure projects will help the PRC (People's Republic of China) government in its goal to combat isolation in western and central regions, both of which suffer from poor accessibility, aggravating income inequality.''

The Washington-based bank specializes in loans and other kinds of help to developing countries.