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UPDATED: December 29, 2006 NO.1 JAN 4, 2007
Two Way Street
"What is good for the Chinese economy is good for the world economy."-James W. Adams
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James W. Adams is the new World Bank Vice President for the East Asia and Pacific Region. In an interview with Tang Yong, Washington-based correspondent of People's Daily, Adams shares his views on regional development and the role of China in the world arena. Excerpts follow:

Tang Yong: What do you think of the role of the World Bank in continuing to support development and poverty reduction in the East Asia and Pacific region?

James W. Adams: In the region you face a range of challenges. The Philippines has been doing much better in respect to economic growth. Indonesia is now growing rapidly and so is Viet Nam. But we still have a number of countries in the Pacific region that have not been growing rapidly and do not have the same dynamic economic policy. We should help those countries build up stronger economic policies to facilitate reform, to get the type of growth that China and Indonesia have seen recently.

A further group of countries in Southeast Asia, like Laos and Cambodia, are growing very rapidly. The challenge is to manage that transformation to middle-income status.

I think China is a separate issue. The World Bank's role in China is modest. The role is not small, with lending over $1.5 billion a year, but relative to its total resources, this is modest for China. World Bank funds can go into two types of projects, one of which can have a direct impact on the levels of poverty and the other type that can support the government in a key policy area. For instance, we worked on a low-pollution coal fire plant, which resulted in the introduction of improved technology to China that is more environment-friendly. So in China we work in both ways.

What is your view of China's growing global impact?

China plays an enormously important role in the international economy today. Of course its growth is an important source of demand. China is the largest importer of goods and raw materials from other Asian countries. It plays an important role in the regional economy. Everyone is watching China in terms of its strategy. An historian friend often reminds me that 200 years ago China represented the largest economy in the world. That changed in the 19th century. But I think China and Asia together have become an economic colossus again today.

If you look at the reality of what is happening, financing has moved to China because it is proven to be a dynamic supplier of low-cost consumer goods. It is increasingly becoming a supplier of sophisticated industrial goods. I see this transformation as largely constructive. Any country can have certain roles that present challenges to the world economy but I think what has been good for the Chinese economy is largely good for the world economy.

What do you think other developing countries can learn from China's successful growth and poverty reduction experience?

I think it is hard to take any country and simply replicate what they have done. But I think the Chinese have done a couple of things that do have broad applications-certainly in terms of its focus on education and health. China has also done some very interesting things overseas with agricultural technology.

What makes it harder in terms of lessons is that there is no other example of a country in the world that has such a large internal base. The other thing that has happened to China, which is unique, is that China has plenty of foreign investment and natural resources. But outside Southeast Asia, the interests in manufacturing and particularly in technology are not the same. Some of China's experiences cannot be simply replicated.

Would you suggest other countries learn from China?

The role of China is changing quickly. It is not just about giving advice in terms of Chinese experiences. The other thing is that China is preparing to finance development projects. China has brought two very different things to Africa. One is that it is coming from the perspective of a recent developing country. That is a fundamentally different perspective from the traditional approach in Africa. The other thing China puts on the table is a very strong message about not trying to provide instructions to the countries of Africa. Africa is probably the most over-advised continent in the world. China is working in a much more neutral and constructive way.

What is your vision for global poverty reduction?

This remains the central objective of the World Bank. Between 2001 and 2004, China reduced poverty from 16 percent of its population to 10 percent-a major achievement.

When will global poverty be wiped out completely according to this timeframe?

This is a different challenge. One thing you have to remember: we have not eliminated poverty even in the United States or Europe. Two challenges are central to the East Asia and Pacific region in terms of numbers of people: China and Indonesia. China's problem is the transformation of its rural areas and the development of a modern economy. Indonesia is very heavily populated like China and it has gone through the transformation to become a more diversified economy. In Indonesia, it is important that it puts in place a framework to improve its business climate.



 
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