Documt of

The World Bank

FOR OFICIAL USE ONLY

Repott No. P-6177-CiA

MEMORANDUM AND RECOMMENDATION

OF THE

PRESIDENT OF THE

IATEPNATIONAL DEVELOPMT ASSOCIATION

TO THE

EXCUTIVE DIRECRS

ON A

PROPOSED CREDIT OF

SDR 108.4 MILLION

TO THE

THE PEOPLE'S REPUBLIC OF CHNA

FOR A

SECOND RED SOILS AREA DEvELOPM PROJECT

JANUARY 1994

MICROGRAPHICS

Report No: P- 6177 CHAType: MOP

This document has a restricted distribution and maY be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bankl authorization.

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CURRENCY EQUIVALENTS(As of August 31, 1993)

Currency Unit - Yuan (Y)$1.00 - Y 5.78

Y 1.00 - $0.17

WEIGHTS AND MEASURES

1 meter (m) - 3.28 feet (ft)1 cubic meter (cu m) - 35.31 cubic feet

1 kilometer (km) - 0.62 miles1 hectare (ha) - 15 mu

1 ton (t) - 1,000 kg2 ,205 pounds

1 kilogram (kg) - 2.2 pounds

ABBREVIATIONS AID ACRONYMS

COC - Government of ChinaGVAO - Gross Value of Agriculture OutputLG - Leading GroupMHU - Ministry of AgriculturePMO8 - Project Management Offices

FISCAL YEAR

January 1 - December 31

FOR OMCAL USE ONLY

CHINA

SECOND RED SOILS AREA DEVELOPMENT PROJECT

Credit and Proiect Summarl

Borrower: People's Republic of China

Beneficiaries: Provinces of Fujian, Jiangxi, Hunan and Zhejiang andGuangxi Autonomous Region

Amount: SDR 108.4 million ($150 million equivalent)

Terms: Standard, with 35 years' maturity

Financint Plan: Local Foreign Total---- -$ million

IDA 60.7 89.3 150.0Central Government 5.3 0.0 5.3Provincial government 24.9 0.0 24.9Prefecturelmunicipallcounty gov't 29.0 0.0 29.0Township government 5.0 0.0 5.0Agricultural Bank of China 36.0 0.0 36.0Beneficiaries 46.2 0.0 46.2

Total 207.1 89.3 296.4

Poverty Category: Not applicable

Economic Rateof Return: 24 percent

Staff AppraisalReport: Report No. 12394-CHA

Maps: IBRD Nos. 25120 and 25121

This document has a restricted distribudon and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

MEMORANDUM AND RECOMMENDATION OF THE PRESIDENTOF THE

INTERNATIONAL DEVELOPMENT ASSOCIATIONTO THE EXECUTIVE DIRECTORS

ON A PROPOSED CREDITTO THE PEOPLE'S REPUBLIC OP CHINA

FOR THE SECOND RED SOILS AREA DEVELOPMENT PROJECT

1. I submit tor your approval the following memorandum and recommenda-tion on a proposed credit of SDR 108.4 million ($150 million equivalent) tothe People's Republic of China to help finance the Second Red Soils AreaDevelopment Project. The credit would be on standard IDA terms with 35 years'

maturity.

2. Countrv/Sector Backaround. China's sustained rural reform program

has revitalized the agricultural sector and provided impressive growth and

structural change through the introduction of the production responsibilitysystem, increased producer prices and an enlarged role for market forcas. The

gross value of agricultural output (GVAO) increased by 83 percent in real

terms during the 1978-90 period (6 percent per annum), substantially fasterthan during the previous 25-year period (3 percent per annum). While signifi-

cant growth in grain production was achieved in the early part of the period

(peaking at 407 million tons in 1984), stagnating grain production was the

Government's central agricultural concern during the late 1980s with produc-

tion ranging between 379 and 405 million tons during the 1985-88 period as

farmers substituted other crops for grain. However, production reached a new

plateau in 1990-92, averaging 440 million tons. The Government's strategy toincrease grain production included diverse measures, such as increasing state

investment in agriculture, mainly in irrigation rehabilitation and expansion,and introducing increasingly fundamental reforms in grain procurement, distri-bution, prices and subsidies. With the recent reforms state control in grain

marketing has been virtually eliminated, wheat and corn farmgate prices now

approach world levels, and fledgling grain commodity exchanges for all major

grains have been established in a number of Chinese cities, e.g., Zhengzhou,

Changchun, Wuhan, Harbin and Changsha.

3. In the context of the preparation of the Bank Group financed Grain

Distribution and Marketing Project, the Government of China (GOC) initiated

the most comprehensive reform programs to date involving the further substan-

tial elimination of grain consumption subsidies, the commencement of abolition

of all grain procurement quotas and consumption subsidies in substantial parts

of the country, the opening of the internal grain trade to all interestedunits and individuals, the thorough commercialization of grain wholesaling and

retailing enterprises, and establishment of a futures market in grain, all of

which is aimed at the eventual market-determined pricing of virtually all

grain in China. Like other countries at a similar stage of development, grainhas declined from about one half to one third of GVAO as production of fruits,

vegetables, and animal products increased to meet changing consumer demand.

Local governments in particular have placed high priority on investment in

uplands, natural pasture, and water resources for expanding production and

productivity of nonstaple food and commercial crops to meet growing demand for

these commodities and increase local entity profits and farmer incomes.

- 2 -

4. Red Soils Areas. China's "red soils areas", so named because oftheir characteristic red or rellow subsoil colors, lie south of the YangtzeRiver and cover 2 million km , or 21 percent of China's surface area. Withinthis large area, the lowlands with alluvial soils and extensive dike and irri-gation systems have been developed primarily for paddy rice. In contrast, thered soil areas of sloping uplands and adjoining hills and mountains are muchleos developed, with extensive areas of degraded, underutilized land. Centu-ries of deforestation and continuous firewood collection, communal grazing, ornonintensive farming have caused considerable soil erosion in these areas.About 10 million ha of underutilized land has potential for development oforchards, and other tree crops, feed crops, pastures and commercial forestplantations provided proper soil management and soil and water conservationtechniques are introduced. Terracing, cultivating forage legumes, applicationof organic manures and chemical fertilizers, including micronutrients, areamongst the required measures.

5. Lessons Learned from Previous Bank ODerations. Lessons learned fromthe recently completed Red Soils Area Development Project (Credit 1733-CHA)have been used in the design of this project. In accordance with the findingsof the project completion report and the performance audit report, greateremphasis is given to crop diversification and marketing aspects in order toavoid the risk of oversupply, particularly of citrus, and account is taken offrost risk in the choice of fruit crops (more emphasis being placed on decidu-ous temperate species) and the siting of orchards. The proposed project wouldbuild on the considerable success of the first Red Soils project but placemore emphasis on conservation and sustainability. Long-term sustainabilitywould be enhanced by assigning responsibility for project management to exist-ing institutions suitably strengthened, rather than creating a new managementstructure. More attention would be given to soil improvemont and soil andwater conservation, particularly during land development and crop establish-ment. Development would be undertaken on the basis of complete small water-sheds enabling the extension of technology for red soil development over awide range of soil conditions and topography.

6. Rationale for IDA Involvement. IDA involvement in the proposedproject would assist the Government in its efforts towards sustainable devel-opment of degraded red soil areas in southern China. The project would alsosupport the Bank Group's agricultural sector strategy to promote sustainaDleagricultural development in impoverished and environmentally vulnerable areasand increase and diversify agricultural production. The Bank's Country Assis-tance Strategy presented to the Board in August 1993 highlighted an intentionto support interventions in the agriculture sector aimed at income enhancementand poverty alleviation in regions of concentrated absolute poverty. Theproposed project is a direct outgrowth of that strategy, delivering a testedwatershed development package to farmers in the relatively poor red soilsareas in southeast China and specifically targeting some of the poorest inthese areas for assistance. The IDA-supported first Red Soils Project waslargely successful in demonstrating the state-of-the-art technology on espe-cially favorable sites. The proposed project would introduce a small "water-shed" approach that would encompass a broader range of site conditions. Atypical watershed would include the steeper sloping, shallower soil areas ofthe upper catchment, where the role of forestry would be more important, aswell as the gentler sloping, terraced land more typical of the first projectareas. The project design draws on the Bank Group's aggregate experience in

-3-

watershad management. IDA involvement would stretgthen land use planning inthe Ministry of Agriculture (MOA), promote the further development of technol-ogy for soil and water conservation and enhance environmentally sound agricul-tural development by improving current practices and introducing proven envi-ronmental protection methods.

7. Proiect Obiectives. The project's main objective is to increaseproduction and productivity over a wide area of degraded red soils in theprovinces of Jiangxi, Fujian, Huran, Zhejiang and the Guangxi AutonomousRegion. The project would help alleviate poverty by increasing the incomes ofcurrently underemployed farmers, many of whom have incomes below provincialpoverty lines. The project would also benefit the environment by improvingsoil and water conservation, reducing erosion and promoting sustainable landuse and agricultural practices.

8. Proiect Description. The project would support the integrateddevelopment of paddy, upland and forest areas totalling some 52,550 ha in 217small watersheds. The main features of the project would be: (a) land devel-opment, including vegetative and structural soil/water conservation treatmentsend on-farm irrigation canals and pumping stations, rural electrification,roads and biogas units; (b) crop establishment and forestry, including fruitend nut orchards, mulberry, tea and paddy rehabilitation and fodder crops;(c) livestock and aquaculture, including dairy cattle, pigs and fish ponds;(d) agroprocessing and marketing, including feed mills, fruit and vegetableprocessing and packing lines, cold storage, and tea processing; and (e) sup-port for research, extension and training and institu.ional development tech-nical assistance.

9. Prolect Implementation. The governments of Fujian, Hunan, Jiangxiand Zhejiang provinces and the Guangxi autonomous region would be responsiblefor overall project implementation under the general supervision of MOA. Acentral project coordinating office would be established in MOA to provideinterprovincial coordination. In each province, a leading group (LG) headedby a vice governor in charge of agriculture would be composed of members fromthe Planning (Economic) Commission and the departments of Finance, Agricul-ture, Water Conservancy, Forestry, Energy and Trade, Materials and the Agri-cultural Bank of China. The provincial LGs would formulate policy guide-lines, approve project plans and facilitate interagency coordination. Pro-vincial project management offices (PMOs) would be responsible for projectdesign, planning and execution. The PMOs would be assisted by the provincialgovernment technical bureaus in planning, organizing, executing, monitoringand evaluating project activities. Similar project management structureswould be set up at county and township levels.

10. The project cost is estimated at $296.4 million equivalent, with aforeign exchange component of $89.3 million equivalent (30 percent), excludingtaxes and duties. The Association would finance $150 million equivalent (51percent of total project costs). To facilitate project st.rt-up, retroactivefinancing (up to a limit of $10 million equivalent) is recomr-inded for prein-vestment planning work and designs, earthworks, structures, irrigation works,power lines, rural roads, land improvement, afforestation, and small quanti-ties of machinery, equipment and materials for expenditures incurred fromApril 1, 1993 to the date of signing the Credit Agreement. A breakdown ofcosts and the financing plan are shown in Schedule A. Amounts and methods of

- 4 -

procurement and of disbursements, and the disbursement schedule are shown inSchedule B. A timetable of key project processing events and the status ofBank Group operations in China are given in Schedules C and D, respectively.Project maps IBRD Nos. 25120 and 25121 are also attached. The Staff AppraisalReport, No. 12394 dated December 20, 1993, is being distributed separately.

11. Project Sustainabilitv. Institutional sustainability is addressedthrough a comprehensive program of technical assistance, training, and studytours to strengthen existing capacity and ensure development of long-termmanagement skills in PMOs, research and extension institutions, and projectbeneficiaries. Financial sustainability is addressed through an appropriatecost recovery program based on project taxes and charges. Water tariffs wouldrecover full annual operation and maintenance costs beginning in the sixthyear of the project, when orchard crops are beginning to bear fruit. Environ-mental sustainability is addressed through the emphasis on comprehensive landuse planning, widespread use of vegetative and structural soil conservationmeasures, increased use of organic fertilizers, and strict controls on agro-processing effluents.

12. Agreed Actions. The main assurances obtained were as followss (a)provincial governments would grant exclusive land use rights to participatingfarmer households for not less than 50 years (in the case of uplands) and notless than 30 years (in the case of existing cropped lowlands); (b) all damsconstructed or improved under the project exceeding 10 m in height or 2.5 mcmin storage volume would be subject to a dam safety review and such small dams,and any others serving the project, would be maintaiued and inspected period-ically under arrangements satisfactory to IDA; (c) provincial PMOs wouldensure that water charges would be collected at rates sufficient to cover fullannual operation and maintenance costs by not later than six years after com-pletion of project irrigation works; and (d) provincial PMOs would (i) notifyIDA of any resettlement resulting from the watershed developments; (ii) sub-mit, prior to any resettlement, plans to IDA for its approval; and (iii)implement the agreed settlement and compensation plans.

13. Environmental Aspects. The project would have significant positiveenvironmental benefits, including increased forest cover and reduced soil andwind erosion. The Agro-Environmental Protection Institute of China in MOA hascarried out an environmental assessment of the project and has submitted areport which has been reviewed by IDA and found satisfactory. The projectwould provide training and technical assistance on appropriate use of pesti-cides and fertilizers. Adequate provision for waste treatment facilities,particularly for agroprocessing, has been included in the project cost and anEnvironmental Management Plan would be established under the project.

14. Program Obiective Categories. The project would help alleviatepoverty by improving the resource base of currently underemployed farmersproviding opportunities for sustainable increases in production and incomes.Women farmers would benefit from specific targeting in project related train-ing programs. The provision of fuel efficient stoves and biogas digesterswould reduce the need for firewood collection and the work load of women.

15. Proiect Benefits. At full development, the project would produce onan incremental annual basis 316,747 mt of orchard crops valued at $1,179 mil-lion, 704,910 m3 of timber valued at $357 million, and 534,618 mt of grain and

fodder valued at $57 million. Incremental annual production of livestock,

aquaculture and sericulture would total $52 million. Value added in agropro-

cessing would amount to $104 million. The focus on watershed rehabilitationand afforestation would create significant environmental benefits, including

reductions in soil erosion and river sedimentation, water run-off and flooding

and overharvesting of natural forests. The project has an overall economic

rate of return of about 24 percent. Per capita income in the project area

would triple for 67,000 households, one quarter of whom presently live below

the poverty line in resource constrained remote upland areas. Significant

employment, especially for women, would be created in all components.

16. Risks. Project risks have been identified and measures incorporated

in the project to minimize their effect. The risk of inadequate management

capacity and poor coordination between provinces would be minimized since

management is essentially in place at provincial and county level and would be

strengthened under the project through provision of training at all levels. A

central project coordinating office would be established in MOA before project

start-up. The risk of frost damage in fruit crops would be minimized by care-

ful site selection for citrus and other susceptible fruit crops. The potential

marketing risk for fruit would be minimized by a high degree of diversifica-

tion of fruit types and products and by investments in improved processing,

packaging, handling and storage. Market information services are also being

strengthened in the project area.

17. Recommendation. I am satisfied that the proposed development creditwould comply with the Articles of Agreement of the Association and recommend

that the Executive Directors approve the proposed credit.

Lewis T. PrestonPresident

Attachments

Washington, D.C.January 5, 1994

- 6 - SCHEDULE A

CHINA

SECOND RED SOILS AREA DEVELOPMENT PROJECT

Estimated Costs and Financint Plan($ million)

Local Foreign Total

Estimated Proiect Costs

Land development 35.7 1.6 37.4Infrastructure development 16.1 13.6 29.8Buildings 16.9 4.9 21.8Machinery and vehicles 0.0 13.4 13.4Crop establishment 67.9 15.8 83.7Livestock development 34.0 5.4 39.4Rural energy 1.9 0.6 2.5Agroprocessing 10.0 18.6 28.6Research 0.6 1.7 2.3Training and TA 1.2 4.6 5.8Project management 4.0 0.0 4.0

Base Cost 188.4 80.2 268.6

Physical contingency 11.8 6.1 17.9Price contingency 6.9 3.0 9.9

Total Project Cost la 207.1 89.3 296.4

Financing Plan

IDA 60.7 89.3 150.0Central Government 5.3 0.0 5.3Provincial government 24.9 0.0 24.9Prefecture/municipal/county gov't 29.0 0.0 29.0Township government 5.0 0.0 5.0Agricultural Bank of China 36.0 0.0 36.0Beneficiaries 46.2 0.0 46.2

Total 207.1 89.3 296.4

/a Project is exempt from taxes and duties.

- 7 - SCHEDULE BPage 1

SECOND RED SOILS AREA DEVELOPMENT PROJECT

Summary oi Proposed Procurement Arrangements($ million)

Procurement methodProject element ICB LCB Other NBE Total

Civil works - 11.1 66.2 - 77.2

(5.5) (20.3) (25.8)

Equipment 8.0 8.1 4.4 - 20.5(8.0) (8.1) (4.2) (20.3)

Vehicles 9.4 - 0.1 - 9.5

(9.4) (0.1) (9.5)

Construction materials 5.7 14.1 21.4 - 41.2(5.7) (14.1) (13.0) (32.8)

Agricultural inputs 12.3 - 14.6 27.1 54.0(12.3) (14.1) (26.4)

Livestock inputs 10.9 - 9.8 17.8 38.6(10.9) (9.8) (20.7)

Livestock maintenance - - 19.5 - 19.5

(5.9) (5.9)

Domestic training and research - - 6.5 - 6.5

(5.5) (5.5)

Overseas training and TA - - 1.9 - 1.9

(1.9) (1.9)

Other - - 3.8 23.8 27.6(1.1) (1.1)

Total 46.3 33.3 148.1 68.7 296.4(46.3) (27.8) (75.9) (150.0)

Note: (1) Other includes force account work, shopping, and direct purchasesand consultancy services.

(2) NBF denotes non-Bank Group financing.(3) Figures in parentheses indicate Bank Group financing.(4) All amounts include physical and price contingencies.

-8- SCHEDULE BPage 2

CHINA

SECOND RED SOILS A_EA DE.'LOPMENT PROJECT

Disbursements

Category Amount of credit Z of expenditures($ million) to be financed

Works 32.7 30Z of total expenditures forforce account and livestockmaintenance, 501 of totalexpenditures for other works

Goods 108.0 Timber, sand and stone 602 oftotal expenditures. Allother goods 1002 of foreignexpenditures, 100l of localexpenditures (ex-factorycost) and 752 of local expen-ditures other items procuredlocally

Training and technicalassistance 6.3 1002

Unallocated 3.0

Total 150.0

Estimated Disbursements

IDA 1995 1996 1997 1998 1999 2000 2001

Annual 28 32 39 23 14 11 3Cumulative 28 60 99 122 136 147 150

_ 9 _ SCHEDULE C

CHINA

SECOND RED SOILS AREA DEVELOPMENT PROJECT

Timetable of Key Project Processing Events

(a) Time taken to prepare the projects 30 months

(b) Prepared by: Government with FAO/CP and Associa-tion assistance

(c) First IDA mission: December 1990

(d) Appraisal mission departure: June 1993

,e) Negotiations: December 1993

(f) Planned date of effectiveness: June 1994

(g) List of relevant PCRs and PPARs:

Credit/Loan No. Prolect PCR Date PPAR No.

Cr. 1733-CHA Red Soils I 02/25/93 12033Cr. 1642-CHA Rural Credit 1I 06/23/93 -

The project was prepared by the following: J. G. Stemp (Agriculturist/TaskManager), R. Scobey (Economist), J. Smyle (Land Resources ManagementSpecialist), W. Zhou (Operations Officer), R. Deshpande (Principal RuralCredit Specialist), R. Grimahaw (Agriculture Advisor), R. Chisholm (SoilScientist, Consultant), C. L. Cheong (Engineer, Consultant), A. Kelly(Economist/Marketing Specialist, Consultant) and B. Wakelin (AgroindustrySpecialist, Consultant). Peer reviewers comprised R. Grimehaw (ASTDR), H.Eisa, J. Srivastava (AGRTN) and H. Wagner (AGRNR). The Division Chief isJoseph Goldberg and the Department Director is Shahid Javed Burki.

- 10 -

Schedute 0Page 1 of 3

STATUS OF BANK GROUP OPERATIONS IN THE PEOPLE'S REPUBLIC OF CHINA

A. STATEMENT OF BANK LOANS AND IDA CREDITS(As of December 31, 1993)

Loan/ Amount (USS miltion)Credit Bor- (net of cancellations)Number FY rower Purpose Bank IDA Undisb.(a)

19 loans and 36 credits have been fully disbursed. 1660.4 2097.6Of Which SECAL:2967/1932 88 PRC Rural Sector Adj. 200.0 93.2

..... ....... ..

2501 85 PRC Changcun (Luan) Coal Mining 79.5 15.42540 85 PRC Railway It 220.0 13.41664 86 PRC Technical Cooperation Credit II 20.0 8.0

2678/1680 86 PRC Third Railway 160.0 (70.0)b) 54.32689 86 PRC Tianjin Port 130.0 - 25.32706 86 PRC Beilungang Thermal Power 225.0 - 6.62707 86 PRC Yantan Hydroetlctric 52.0 - 0.5

2723/1713 86 PRC Rural Health & Preventive Ked. 15.0 65.0 31.32775 87 PRC Shuikou Hydroelectric 140.0 0.0

278311763 87 PRC Industrial Credit IV (CIB IV) 250.0 C50.0)(b) 0.52784 87 PRC Shanghai Machine Tools 100.0 7.21764 87 PRC Xinjiang Agricultural Dev. - 70.0 3.0

2794/1779 87 PRC Shanghai Sewerage 45.0 100.0 37.52811/1792 87 PRC Bei3ing-Tianjin-Tanggu Expressway 25.0 125.0 21.12812/1793 87 PRC Gansu Provincial Dev. 20.0 150.5 45.1

1835 87 PRC Planning Support & Special Studies 20.7 7.92838 87 PRC Fertilizer RatIonalization 97.4 - 3.52852 87 PRC Iujing Thermal Power 190.0 - 25.01871 88 PRC Rural Credit III - 170.0 2.0

2877/1845 88 PRC Huangpu Port 63.0 (25.0)(b) 40.82907/1875 88 PRC Dalian Port 71.0 (25.0)(b) 5.11885 88 PRC Northern Irrigation - 103.0 23.9

2924/1887 88 PRC Coastal Lands Dev. 40.0 (60.0OXb) 4.71908 88 PRC Teacher Training - 50.0 0.12943 88 PRC Pharmaceuticals 127.0 - 4.9

2951/1917 88 PRC SSchuan Highway 75.0 (50.0)(b) 54.22952 88 PRC Shaanxf Highway 50.0 - 1.71918 88 PRC Daxing An Ling Forestry - 56.2 3.12955 88 Poo; Seilungang II 165.0 - 27.62958 88 PRC Phosphate Dev. 62.7 18.02968 88 PRC Railway IV 200.0 - 61.21984 89 PRC Jiangxi Provincial Highway - 61.0 13.41997 89 PRC Shaanxi Agricultural Dev. - 106.0 40.32006 89 PRC Textbook Development - 57.0 2.12009 89 PRC Integrated Reg. Health - 52.0 21.83006 89 PRC Ningbo & Shanghai Ports 76.4 - 22.53007 89 PRC Xiamen Port 36.0 - 16.83022 89 PRC Tianjin Light Industry 154.0 . 94.3

3060/2014 89 PRC Inner Mongolia Railway 70.0 C80.0)(b) 30.72097 89 PRC Shandong Agriculture Dev. - 109.0 9.73066 89 PRC Hubei Phosphate 137.0 - 107.1

3073/2025 89 PRC Shandong Prov. Highway 60.0 (50.0)(b) 26.43075 89 PRC Fifth Industrial Credit 300.0 - 144.62097 90 PRC Jiangxi Agric. Dev. - 60.0 22.22114 90 PRC Vocational & Tech. Educ. - 50.0 16.32145 90 PRC National Afforestation - 300.0 165.02159 90 PRC Hebei Agricultural Dev. 150.0 74.12172 91 PRC Mid-Yangtze Agricultural Dev. - 64.0 27.1

3265/2182 91 PRC Rural Credit IV 75.0 200.0 R9.03274/2186 91 PRC Rural Indust Tech (SPARK) 50.0 64.3 79.23286/2201 91 PRC Mediin-Sized Cities Dev. 79.4 89.0 94.1

- 11 -

Schedule 0Page 2 of 3

Loan/ Amount (US$ million)Credit 80r- (net of cancellations)Number FY rower Purpose Bank IDA Undisb.(a)

3288 91 PRC Shanghai Industrial Dev. 150.0 147.92210 91 PRC Key Studies Development 131.2 7Z.22219 91 PRC Liaoning Urban Infrastructure 77.8 21.3

3316/2226 91 PRC Jiangsu Provl. Transport 100.0 (53.6)(b) 75.92242 91 PRC Henan Agricul. Oev. 110.0 81.6

3337/2256 91 PRC Irrig. Agricul. Intensif. 147.1 187.9 196.03387 92 PRC Ertan Hydroelectric 380.0 115.32294 92 PRC Tarim Basin 125.0 96.12296 92 PRC Shanghai Metro Transport - 60.0 42.93406 92 PRC Railways V 330.0 263.2

3412/2305 92 PRC Daguangba Multipurpose 30.0 37.0 47.02307 92 PRC Guangdong ADP - 162.0 138.0

3415/2312 92 PRC Beijing Environment 45.0 80.0 109.72317 92 PRC Infectious and Endemic Disease Cont - 129.6 107.33433 92 PRC Yanshi Thermal Power 180.0 - 135.52336 92 PRC Rural Water Supply and Sanitation - 110.0 100.72339 92 PRC Educ. Development in Poor Provs. - 130.0 102.93443 92 PRC Regional Cement Industry 82.7 - 81.63462 92 PRC Zouxian Thermal Power 310.0 - 287.43471 92 PRC Zhejiang Provincial Highway 220.0 178.82387 92 PRC Tianjin Urban Devt. & Envir. - 100.0 95.72391 92 PRC Ship Waste Disposal - 15.0 15.62411 93 PRC Sichuan Agricultural Oevt. - 147.0 123.03515 93 PRC Shuikou Hydroelectric II 100.0 - 90.22423 93 PRC Financial Sector TA - 60.0 59.53530 93 PRC Guangdong Provincial Transport 240.0 226.13531 93 PRC Henan Provincial Transport 120.0 - 101.42447 93 PRC Ref. Inst'l and Preinvest. 50.0 46.23552 93 PRC Shanghai Port Rest. and Devt. 150.0 - 150.02457 93 PRC Changchun Water Supply & Env. - 120.0 122.42462 93 PRC Agriculture Support Services 115.0 113.0

3560/2463 93 PRC Taihu Basin Flood Control 100.0 100.0 182.72471 93 PRC Effective Teaching Services - 100.0 101.93572 93 PRC Tianjin Industry II (c) 150.0 - 150.03582 93 PRC South Jiangsu Envir. Prot. (c) 250.0 - 250.02475 93 PRC Zhejiang Multicities Devt. 110.0 112.13581 93 PRC Railway VI 420.0 - 420.03606 93 PRC Tianhuangping Hydroelectric 300.0 300.0

3624/2518 93 PRC Grain Distribution 325.0 165.0 493.12522 93 PRC Envirormental Tech. Assist. - 50.0 49.92539 94 PRC Rural Health Workers Devt. - 110.0 112.13652 94 PRC Shanghai Metro Transport It (c) 150.0 - 150.03681 94 PRC Fujian Provincial Highways (c) 140.0 140.03687 94 PRC TeLecommunications (c) 250.0 250.0

Total 9970.6 6972.8 7365.1

of which has been repaid 735.5 4.0Total now held by Sank and IDA 9235.1 6968.8

Amount sold: Of which repaid

Total Undisbursed 4670.3 2694.8 7365.1

(a) As credits are denominated fn SDRs (since IDA Replenishment VI), undisbursed SDR creditbalances are converted to dollars at the current exchange rate between the dollar and the SDR.In some cases, therefore, the undisbursed balance indicates a dollar amount greater than theoriginal principal credit amount expressed in dollars.(b) Credit fully disbursed.(c) Not yet effective.

- 12 -Schedule DPage 3 of 3

B. STATEMENT OF IFC INVESTMENTS(As of December 31, 1993)

Inveat- Type of Loan Equity Totatment No. FY Borrower Business - (USS Million) -

813/2178 85/91 Guangzhou and Peugeot Autwmobi to 15.0 4.6 19.6

974 88 China Investment Co. Investment 3.0 0.0 3.0

1020 88/92 Shenzhen China Bicycle 17.5 2.5 20.0Bicycles Co. Ltd. Manufacture

1066 89 Crown Electronics Electronics 15.0 15.0

1119 89 Shenzhen Chronar Solar Solar (a) 2.0 1.0 3.0Energy Energy

3423 93 Shenzhen PCCP Manufacturing 4.0 1.0 5.0

3150 93 Vantai Cement Cement 28.7 2.0 30.7

Not yet signed 93 JV Commercial Bank Banking - 7.5 7.5

Total Gross Commitments 85.2 18.6 103.8

Less canceltations, terminations 2.0 - 2.0repayment and sales

Total Comitments now Held by IFC 83.2 18.6 101.8

Total Undisbursed 28.7 5.8 34.5

(a) Loan subsequently cancelled.

12/31/93EA2DR

IBRPD 25120

C H I N A 120°

CHINA/

SECOND RED SOILS AREA DEVELOPMENT PROJECT .ZHEJIANG, FWIAN AND JIANGXI PROVINCES o. JIANGSU

PROJK:T COUNTIES (ANI

A AGRO PROCESSING PLANTS /

ROADS

-.--- |RAILROADS

COUNTY (XIAN) BOUNDARIES

_ -PROVINCE BOUNDARIES ,

IMENATONA SONDRIS X E 4 2 f | Po=U rsPN c

~~~~~ X.lChongxanTIWshen 1Ys

,r,g,r ¢ ~~ ~~6 Ynkn 6- Jiangle 6. Jinxi

0 40 80 T20 160 20 8. Qi 7ShT 7Nnln

I I . I I I .J** Jinu8-Saio -inxic

laLOMETERS~~~~~~~~~~ ~~~ 9longou 9 Ncnping t Linchuon

'on~uWO 1993

$ , The~~~t~uweJ 14. 144

22 ..~~~~~~~~~~~~~~~~~~~ ~ ~ ~ ~ ~ ~ ~ -ng Wyhongp 15. Wonzo

1.6. Njnini 16. jinxin

7. wyi 17. sh .. hv 17. Nand-V

0 AO 80 120 160 200 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~OCOBR19

IBRD 25121

105o 110,

CHINA

SECOND RED SOILS AREA DEVELOPMENT PROJECTHUNAN AND GUANGXI PROVINCES 0 40 80 120 160 200

. PROJECT COUNTIES (XIAN) KILOMETERS

A AGRO PROCESSING PLANTS

ROADS > HUBE/-.--- '-- RAILROADS c o

COUNTY XIAN) BOUNDARIES '

30' -. - PROVINCE BOUNDARIES

* - INTERNATIONAL 8OUNDARIES

PROJECT COUNTY BY PROVINCEHUNAN GUANGX)G,i = 9 1 i > l

IHengyong 1.Qunzhou I.2. Hengshon 2. Lungeon'> 4i-.!2Cn2-7> ,u3 Hendowng 3- Yingon4. lieignan 4- Lingui5. Qidong 5. Rongon6. Qjyong 6. lmlijog| 7lengshuithn 7 Zhongshon8a CLhngning 8. Pingnan9- Wiyang 9. GuijpingLo

to. Yngzhou 10. Ovigon11. xintion 11. Beiiu 12. Guiyong 12. Luchwuan13. y_qngxn 13. Fondlie

14. riongyong 14. Cliogzuo15. Dooxiion 15. Tionyong116. Ningyuon

18b Yihanj osgab 5H

G nw~~~~~~^¢nbis . . r M ~ ~ ~ MAAO KNG?imqi ho~nc ipi,nepo.a byfleWodS -p,w 80 k' u sourw CHINe SEA

105~ Rdx SOUTHe w CHINA SEA

OCTOBER 1993