The FINANCIAL — Asian Development Bank (ADB) President Takehiko Nakao addressed the China Development Forum (CDF), which opened on March 25 in Beijing. Mr. Nakao will meet Premier Li Keqiang along with other participants of the CDF. He also participated in a roundtable with Vice Premier Liu He.
During his visit to Beijing, Mr. Nakao met the new Finance Minister and ADB Governor Liu Kun to exchange views on the status of the global and PRC economies, the PRC’s reforms including in the fiscal area, and the strong development partnership between ADB and the PRC. Minister Liu and Mr. Nakao agreed to promote regional cooperation through the Belt and Road Initiative, the Central Asia Regional Economic Cooperation Program, and the Greater Mekong Subregion Economic Cooperation Program, according to ADB.
In his remarks to the CDF, Mr. Nakao praised the PRC for its remarkable development over the past 40 years. The PRC has grown from one of the poorest countries in the world to the second largest economy globally, and it is on the verge of reaching upper-income status. “The China Development Forum is especially memorable this year as it marks the 40th anniversary of China’s start of reforms and opening up,” said Mr. Nakao.
Mr. Nakao highlighted three policy challenges for the PRC as it transitions to high-quality growth in a new era: (i) inclusiveness, (ii) climate change and the environment, and (iii) an aging society. He emphasized, in particular, the need for inclusive development. Mr. Nakao remarked “China is already a very dynamic and innovative country with momentum for continued growth. Making society more inclusive and equal is a greater challenge for China than achieving further technological development and industrial transformation.”
In his speech, Mr. Nakao stressed that macroeconomic stability and efficient markets are prerequisites for tackling the three challenges and, more generally, promoting sustainable and inclusive growth.
ADB operations are supporting the PRC in meeting the three challenges.
To support inclusiveness, ADB is providing the country with technical assistance to reform the tax system. Making the taxation more progressive and broadening the coverage of personal income taxes will improve equity and help augment government revenue to fund the delivery of social services. ADB is also focusing on education and skills development, including technical and vocational education and training, especially in lagging areas such as Guangxi and with a focus on gender. In addition, ADB is supporting small and medium-sized enterprises through microfinance and capacity building.
Mr. Nakao commended the PRC’s efforts in promoting a better environment, building a green economy, and mitigating climate change under the COP21 Paris Agreement. Since 2015, ADB has been working with the government to improve air quality in the Greater Beijing–Tianjin–Hebei region through a series of reform programs and projects. ADB is also planning to provide $2 billion during the 13th Five-Year Plan period of 2016–2020 to help the PRC address water pollution control and water resources management in the upper and middle reaches of the Yangtze River.
ADB is supporting the PRC’s development needs in an aging society, where the number of people aged 65 years and older reached a record 158 million in 2017. For example, ADB has been supporting efforts to reform the rural social security system, strengthen health and pension administration, and build age-friendly cities.
The CDF is a high-level event organized by the Development Research Center of the PRC’s State Council. Founded in 2000, the annual event offers a platform for global business leaders, representatives of international organizations, and international experts including Nobel Laureates to have direct dialogue with the PRC’s top decision makers and economic planners. Mr. Nakao has attended the CDF since 2014 as one of the first foreign speakers.
The PRC became an ADB member in 1986. Between 1986 and 2017, ADB provided close to $38 billion in loan assistance to the PRC, comprising $34 billion for the public sector and $4 billion for the private sector. ADB has also been supporting the PRC through knowledge work, with $334 million in technical assistance grants approved since 1986.