The World Bank's Board of Executive Directors approved on
Tuesday a loan of US$100 million loan to China to help finance
the Inner Mongolia Transport and Trade Corridor Project, which
will promote and sustain the development of China's cross-border
trade with Russia and Mongolia by improving transport
infrastructure and logistics. These improvements, in turn,
will lower transport costs, increase income from external trade,
and raise incomes in Inner
Mongolia, the country's third-largest province and one of the
poorest provinces of the western region.
The objective of the project is designed to maximize the use of
transport infrastructure to promote international trade through
Inner Mongolia in general and Hulunbeier League in particular. It
will help accelerate the general development of Hulunbeier League,
preparing it to cope with the increasingly important role the
central government has assigned to it to be the country's main
contact point for trading with Russia.
In so doing, the project aims to: (i) improve the capacity of
transport infrastructure and network planning to handle the
significant increase in the volume of international freight traffic
along China's northeastern border; (ii) develop a freight transfer
and trade facilitation program to meet the growing demand for
cross-border trade; and (iii) provide technical assistance to the
Inner Mongolia Communications Department (IMCD) and Hulunbeier to
build their capacity to plan, facilitate, and manage increasing
demand for transportation of international trade traffic.
"The task team from the bank and our colleagues in Inner
Mongolia and Hulunbeir Leagues are excited about the project, which
is the first in China that is comprehensive in dealing with the
logistic and trade aspect of the transport issue, apart from the
transport infrastructure itself," said Supee Teravaninthorn, World
Bank task manager for the project. "China shall struggle to improve
not only its transport infrastructure, but its trade logistics in
order to effectively lower its cost and increase its
competitiveness in the post-WTO entry. The project is
designed to do just that."
The project includes the following components:
· Component 1 -- Hailar-Manzhouli Highway. Expansion of highway
capacity by upgrading or constructing about 177 km of
Hailar-Manzhouli Highway.
· Component 2 -- Border Roads for Trade. Upgrading and
rehabilitation of about 435 km of the highway network, sections
identified either as key links for international trade facilitation
at smaller border crossings with Russia and Mongolia, or as
critical missing links in the highway network. The component aims
to improve transport access to four other seasonal land ports
between China and Russia and China and Mongolia.
· Component 3 -- Cargo transfer terminal and trade facilitation
program. Development of facilities and trade regime designed mainly
for China's import and export trade with Russia and Mongolia, but
also meeting the requirements of potential trade in transit shipped
through Chinese seaports to other countries. The primary purpose of
the cargo transfer terminal is to facilitate the consolidation,
distribution, and trucking of cargo. The component is composed of:
(i) construction of a transfer station in Hailar housing facilities
for transferring cargo between transportation modes (rail and road)
and between Chinese and Russian trucks as well as for warehousing;
and (ii) carrying out of a diagnostic study on measures to promote
cross-border trade between China and its land-locked
neighbors.
· Component 4 -- Institutional strengthening and training.
Various technical assistance and training aiming to improve the
quality of development zone planning, trade promotion, and
transportation efficiency, as well as project management,
environmental monitoring, and supervision of highway
construction.
The loan for the Inner Mongolia Transport and Trade Corridor
Project has a maturity of 20 years, including a five-year grace
period.
(China.org.cn February 16, 2005)