China is determined to forge ahead with major construction projects even if the World Bank and other international institutions continue their suspension of new loans to China, said the mayor of Ningbo, a large Chinese port city.
"We rely on both external loans and internal resources," said Geng Dianhua, one of five Chinese mayors who took part in an interview with reporters and editors at The Journal of Commerce office here Tuesday."Of course, we are hoping for World Bank loans as well as other loans to speed up infrastructure development," Mr. Geng said.
(Such loans may be forthcoming fairly soon. In a statement issued Tuesday at the economic summit in Houston, leaders of the world's richest democracies agreed to consider resuming limited World Bank loans that would contribute to increased economic reforms and environmental protection in China. Japanese Prime Minister Toshiki Kaifu said he would resume a frozen $5.6 billion loan to China, as a way to encourage political reform.)
In an address Monday afternoon to a group of businessmen in New York, Zhu Rongji, mayor of Shanghai, urged them to consider fresh, new investments in China and expressed cautious optimism that the World Bank would soon resume lending to China.
The Chinese mayors will be meeting with World Bank officials in Washington later this week.
The World Bank, the Manila-based Asian Development Bank and aid agencies
from Japan and most major Western nations all suspended approvals of new loans to China last year after the June 4 crackdown on pro-democracy demonstrators. The banks have continued to provide funds for projects approved before then, and their staffs have continued to negotiate with the Chinese on possible new loans.
The value of the loans suspended by the World Bank is estimated at some $2 billion to $3 billion. However, this spring, the bank approved $590 million in ''soft loans" to China, which carry negligible interest charges and are intended to meet basic human needs, such as earthquake relief.
Several of the mayors mentioned projects in their cities that are being financed at least in part with World Bank loans. Sun Tongchuan, mayor of Chongqing, a city of 14.5 million people, noted that the bank is helping to finance construction of a highway linking his city with Chengdu, another city in the inland province of Sichuan.
Mr. Sun acknowledged that the continued suspension of new loans would create some problems for China, but noted that lending countries have also been hurt by sanctions.
After the United States imposed sanctions last year, he said, Chongqing signed an agreement with a Swedish telephone company for the installation of new phone exchanges because Sweden agreed to continue providing aid.
In his address Monday, Mr. Zhu of Shanghai said investing in China is far safer than investing in Eastern Europe or the Soviet Union.
"The investment climate in China will continue to improve," he said, warning investors that Eastern Europe and the Soviet Union were at least 10 years behind China's economic reform program.
The mayor said he sensed an Eastern Europe and Soviet Union "fever" on this trip instead of the "China fever" he had encountered on earlier visits.
In the interview, Zhao Baojiang, mayor of Wuhan, said Taiwanese businessmen now have a fever for investing in China. "Taiwan people understand the political and economic situation in China better than Americans," he said.
Mr. Zhu, who has been described as a liberal economic reformer in a national leadership dominated by hard-line advocates of last June's crackdown, sought to remove any doubt that China would veer from an economic reform program that depends on substantial outside assistance.
The political situation in China "is very stable and will continue to be stable," he said.
As evidence, Mr. Zhu pointed to his city's government-backed Pudong New Area industrial complex. That project aims to develop a 135-square-mile area on the east bank of the Huangpu River where foreign investors could take advantage of lower taxes and preferential land leases.
The core of the $6.5 billion, five-year program is the expansion of Shanghai's port. Mr. Zhu expects the initial phase of the expansion, which will ultimately enable the port to handle up to 26 million tons of freight annually, to be completed in slightly more than two years.