An experimental project in southwestern China's Guizhou Province proved that construction aided by commercial loans from the Asian Development Bank (ADB) in China's poor areas is able to get good economic returns, according to an ADB official.

The project, called ADB-aided Nayong poverty-relief pilot project, has been going on in Guizhou for five years. The bank provided US$199,000, said Wu Guobao, a poverty-relief consultant with the ADB China office, at a symposium held recently in the province on poverty alleviation in rural areas.

Latest local survey shows that the project recorded an investment return of as much as 15 percent.

The cooperative project launched by the ADB and the Chinese government directly assessed the feasibility of relieving poverty with commercial loans from the ADB. Experiment findings from the project will be used for making policy adjustments in capital management, petty credit extension, rural infrastructure construction and farm produce processing, according to Wu Guobao.

With 97 percent mountains and as a home to 49 ethnic groups, Guizhou Province is the quintessential poor rural region of China. The area accounts for 10 percent of the nation's 29-million rural population living in absolute poverty, or on less than US$76.7 a year.

If the above pilot program succeeds in Guizhou, it should achieve the same result in other places of China, said Min Tang, chief economist with the ADB China office.

The experimental project has established six drinking water systems, built 2.4 kilometers of irrigation channels and 3.8 kilometers of highway and provided electricity for farmers from two villages. It has also extended development funds to 46 rural households, according to Min Tang.

The local survey also found that from 1999 to 2003, two villages covered by the project had their per-capita pure income increase by 97 percent and 86 percent, respectively, to 1,434.63 yuan (US$172.85) and 1,135.6 yuan (US$136.82).

(Xinhua News Agency October 9, 2004)