China is home to 20 of the 30 cities in the world with the worst air
pollution, and that risks getting worse as more and more Chinese buy cars,
Dollar noted.
"If China does not control emissions the whole world will suffer for that,"
he said. Many of the country's waterways are clogged with industrial and
household waste, the official added.
China's leaders do recognise the problem, he said, describing tough new
targets to reduce gas emissions and improve water quality.
After the environment, inequality and "social exclusion" are "the next
biggest problem" for China's long-term development, Dollar said.
The country's average gross domestic product per head is 1,740 dollars. But
in cities like Shanghai, that rises to 8,000 dollars.
Cities inland have suffered from corruption, red tape and antiquated
industries. On the land, meanwhile, there remain 800 million farmers trying to
eke out a living in often desperate poverty.
Finding more even patterns of development is the "critical next phase for
growth" in China, along with moving away from its export model of expansion to
one more reliant on domestic growth, Dollar said.
In its newly adopted partnership strategy, the World Bank plans to offer its
cash and expertise in five key areas:
-- Integrating China into the world economy, through encouraging Beijing to
play a deeper role in bodies such as the International Monetary Fund and the
World Trade Organisation.
-- Reducing poverty and inequality, by expanding basic social services,
particularly in rural areas.
-- Managing scarce resources and environmental challenges. Key to this will
be raising the price of petrol, which Dollar said is as cheap in China as it is
in Saudi Arabia, thanks to heavy government subsidies.
-- Deepening financial markets, by increasing access to services for small
and medium-sized companies.
-- Improving government and market institutions, through public-sector
reforms to make bureaucracy more efficient.
Dollar, however, said China was right to resist US calls to rapidly throw
open its currency to market forces. Premature reform would be destabilising, he
said.
