China, World Bank Establish $50Mln Trust Fund to Counter Poverty

The president of the World Bank Jim Yong Kim has revealed that his organization was not coerced by China into deleting parts of its latest economic report about the country that highlighted problems in the nation’s financial system.

The World Bank president, who is on a three-day trip to China, also met Jin Liqun, Secretary-General of the Multilateral Interim Secretariat of the Asian Infrastructure Investment Bank.

“We think that the commitment to reforms and the fundamentals of this economy are very promising and that we will continue to work closely with the government on a range of issues”, he added.

China’s stock market was among the world’s best performers earlier this year, with the Shanghai Composite Index (SCI) up more than 150 percent in 12 months, partly fueled by margin trading. The report, which was subsequently redacted, slammed the country for “distorted incentives and poor governance structures” and called for China to make “fundamental reforms” including reducing its ownership stake in state-run enterprises. “In situations all over the world, governments have taken different measures to reduce volatility in their stock markets”, he said.

“China has built the world’s second largest economy and it has undertaken significant reforms aimed at providing all of its citizens with an opportunity to enjoy greater prosperity”, the WBG chief said at a press conference in Beijing. “We plan to hold a meeting later this year in Washington D.C.to talk about specific projects in which we would be co-investors”, he said.

He said China has a strong resolve in continuing the adoption of fiscal and financial reforms to transform its growth model, reports Xinhua news agency.

Before meeting with the Prime Minister on Thursday, Kim signed an agreement with China to create a $50 million poverty relief fund. The fund, which is expected to strengthen the cooperation between both sides, will provide financing for investment, research and support human resource improvement initiatives globally, according to China Daily.

Kim said China is a strong partner of the World Bank Group.

“The AIIB will join us and other development banks in addressing huge infrastructure needs that are critical to ending poverty”, he said.

Bert Hofman, the institution’s country director for China, said that the section was “not the official World Bank position”, and it would undergo a review process “in the future”.