The International Finance Corporation is the private sector arm of the World Bank Group. IFC's mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances investments with its own resources and by mobilizing capital in the international financial markets. IFC also provides technical assistance and advice to governments and businesses.

• IFC is the world’s largest multilateral source of equity and loan financing for private enterprises in developing economies. Its financing is long-term and market-priced.
• IFC’s share capital is provided by its 178 member countries, which collectively determine policies and approve investments.
• IFC committed 217 projects in 65 countries in FY2004 providing US$4.8 billion.
• IFC shares project risk with sponsors and financial partners but does not participate in project management.
• IFC finances only a portion of the cost of any project. For every US$1 of IFC financing, other investors and lenders provide US$5.
• IFC's charter requires it to operate on commercial terms, targeting profitability. Corporation has made a profit every year since its inception.
• IFC does not accept government guarantees.

IFC’s participation in projects helps reassure and balance the needs of each party in a transaction: foreign investors, local partners, other creditors and government authorities.

IFC in China

In FY05, IFC committed $400 million in 17 projects. Since its first investment in 1985, and as of June 30, 2005, IFC has invested 92 projects in China. For these projects IFC has provided US$2.2 billion: US$1.6 billion for IFC’s own account, and US$567 million for the account of participating banks.

IFC operations in China are focused on:

• Catalyzing investments through limited recourse financing.
• Encouraging the development of China’s local private sector, including small and medium sized enterprises.
• Investing in the financial sector to develop competitive institutions that will meet international corporate governance and operating standards.
• Supporting the development of China’s western and interior provinces.
• Promoting private investment in the infrastructure, social services and environmental industries.

The private sector has become a critical component of China’s economy. IFC seeks opportunities to finance local private companies which have had limited institutional support.

In addition, IFC’s support to local small and medium sized businesses helps to alleviate the effects of the transformation of the state-owned enterprises.

China’s effort to liberalize its financial sector will offer new opportunities to IFC to support the development of viable private financial institutions, especially in the banking and insurance sector.