Yukon Huang, Country Director, The World Bank China Program

Honorable Mayor Xu, Vice Mayor Han, Director Hong (SEPB),  

Ladies and Gentlemen.

It is a great pleasure and honor for the World Bank to be a co-organizer of this important conference as part of our collaborative program with Shanghai Municipality.  

China is undergoing two profound transitions ¨C from a command economy to a market economy, and from a rural, agricultural economy to an urban society.  These changes put great stress on the environment and the social fabrics of its cities, presenting challenges of  management, finance and equity, to mention a few.  

The Shanghai government has shown strong leadership in recognizing the importance of the urban environment for sustainable economic growth, most recently eloquently articulated in its new Five Year Plan.  Shanghai has made remarkable achievements in the 1990s, both in restructuring the city¡¯s economy and upgrading its infrastructure, while at the same time protecting and improving its environment.  It is an engine of growth in China, and a leading city-region in Asia.  Shanghai has in many areas set an example for environmental policy and institutional reforms for other cities in China, and is increasingly becoming an important ¡®resource¡¯ city for Asia and beyond.  

This conference offers an opportunity to both learn from Shanghai and to share national and international expertise and experience, drawn from major cities, academia, and industry (the private sector).  

This is a rare opportunity to discuss some of the challenges to urban environment improvement that cities across the world are facing: industrial pollution control, air and water quality management, and financing for sustained improvements.  I would like to thank the Shanghai Municipal Government for providing such an opportunity.  The conference is particularly important in light of the emphasis the Chinese Government has given to the role of urbanization in the next decade.

I would like to make a few points on the subject of the conference.

In their quest for improved livability and competitiveness, cities around the world are giving more attention to urban environmental issues, and increasingly so from a regional perspective.

China¡¯s further opening to the outside world, signaled by its joining WTO will lay out the necessary conditions for progressive urban development.  But competition between cities, both within and from outside China, is stronger than ever.  Local, regional and global issues are converging.  Cities are increasingly involved in global competition, for financing, for investments, and more, and need to be highly proactive to prosper in this new environment.  Continued augmentation of environmental infrastructure coupled with optimization of existing assets will be critical for the competitiveness of cities like Shanghai.  

Cities around the world are also making greater strides in changing the role of the government from a service provider to more of an enabler and facilitator for service delivery.  The environment of cities depends on the quality of various municipal services, and the efficiency and effectiveness of these services, in the end, will determine the livability and quality of life for its residents.  This is also increasingly becoming an important element of a city¡¯s global competitiveness.  

Water and air transcend jurisdictional boundaries, and consequently  need to be addressed on a regional basis.  City management must not only deal with core urban areas, but peri-urban areas of surrounding cities and towns and the rural hinterland, implications of river basins etc.  Shanghai is a good example, with a large metropolitan areas, and  being situated at the heart of the Yangtze Delta Economic Region.  

The World Bank has a long and productive collaboration with Shanghai in improving the city¡¯s urban environment and infrastructure.  During the last 20 years we have had the opportunity to assist Shanghai in its  institutional reforms and capacity building, and have provided financing for a large and diversified portfolio of investment projects corresponding to lending of close to $2 billion, or about 5% of the total lending to China, including projects for improved water and wastewater management, roads, ports, and power supply.  The Shanghai Municipality was one of the earliest in China to corporatize the wastewater operations and to implement a wastewater tariff.  It was also the first to successfully implement a citywide urban information system for the planning and management of urban construction.  

Shanghai has demonstrated that rapid economic development does not need to be at the expense of environmental degradation.  Indeed, Shanghai has shown that an attractive environment is an indispensable ingredient of a city¡¯s competitiveness.

Again, we are pleased to have the opportunity to contribute in a small way as a partner with Shanghai to advance the important subject of this conference.  The challenges are many.  

On behalf of the World Bank, I welcome you to the conference and wish you productive deliberations.

Thank you.