At the end of 2007, China announced for the first time that it would contribute to the International Development Association (IDA), the part of the World Bank Group that provides grants and no-interest credit to the world's poorest countries. As Robert Zoellick, President of the World Bank, said at the time, China had moved within less than a decade from being a successful IDA recipient to being a global partner.

In an exclusive interview with Beijing Review reporter Yu Shujun, David Dollar, the World Bank's Country Director for China and Mongolia, discusses China's cooperation with the international bank, the areas of future cooperation, the economic development of China and its role in the world economy.

Beijing Review: What is your reaction to China's announcement about becoming a contributor to the IDA?

David Dollar: This is wonderful news. China is playing a more and more important role in the whole world economy and is doing a lot to help other developing countries in Africa, Asia and Latin America. China's contribution to the IDA is one more way that it is helping with large-scale development. The World Bank's IDA fund is the largest source of funding for low-income countries. There are 45 different countries that contribute to the IDA. It's really a great development that China has joined this group. When Premier Wen Jiabao met (World Bank) President Zoellick, he said this was a sign of China's support for the World Bank, and recognized that China thinks the World Bank plays an important role in the world. So we're happy to have this show of support from China.

China is still a developing country and needs to continue cooperating with the World Bank. What kind of future cooperation do you see developing between China and the World Bank?

China is still a developing country. It still has a fairly large number of poor people and a lot of development issues. I think the biggest development issues that China faces are resource scarcity and environmental degradation. So strengthening environmental protection is really a key issue. This is reflected in the government's program and its interest in creating a more harmonious society and a recycling economy. So I think we're at the stage where the World Bank is very willing to work with China on its development issues, and China is still interested in borrowing from the World Bank to address social and environmental issues.

China, by many measures, is still the largest client of the World Bank. Now we're only lending about $1.5 billion per year, which is not a large amount for China. But we have about 75 projects under implementation. That's the largest portfolio of projects. Increasingly, these projects are addressing environmental issues. We do a lot of work on water; that is, cleaning up polluted rivers and lakes, treating wastewater from factories and households and managing water. We work with quite a few cities on their overall urban environment, including how to reduce air pollution and create a better quality of life. We do a lot of work on reforestation. So, different types of resource and environmental issues are key parts of our work. The most important is that we're trying to do more work on energy efficiency, helping China and its economy become more energy efficient.

On the social side, we're working on a new project to strengthen the rural health care system. We do a kind of pilot projects dealing with particular social issues such as how to facilitate rural-urban migration and how to strengthen rural vocational education.

At the same time, China is emerging as a very important economy in the world, and I think it has a very positive effect on other developing countries. Much of that is just happening through trade and investment. But some of that is also happening through Chinese development assistance. The World Bank is very interested in working together with China on development assistance in other countries.