In a recent interview with CGTN's Liu Xin, Asian Development Bank's (ADB) outgoing president Takehiko Nakao cleared the air on whether the ADB will phase out lending to China. 

This was in reference to comments made earlier this month by the multilateral lender's incoming president Masatsugu Asakawa, whose role will take effect in January 2020. 

"He was asked about the possibility of phasing out. He mentioned that we should closely consider those issues in a very general term," Nakao said, adding that: "I don't think there is a clear change of policies about ADB lending to China."

Asakawa told the press he's open to discussions about loans to high- and medium-income borrowers such as China. 

Nakao believes there are gains in continuing to lend to China because it is a good borrower with high credit and has been repaying on schedule. He wants to continue to lend to China, at least for some time in the future.

ADB values China as a lender and partner

By the end of 2018, after more than three decades of cooperation, ADB had committed 39 billion U.S. dollars to China, of which 35 billion U.S. dollars was used for the public sector and four billion U.S. dollars for the private sector. 

Nakao analyzed the benefits of lending to China in economic terms and developmental sense. 

The ADB is not lending to China with the subsidy; it's not concessional lending. The loans cover the administrative cost and can be useful in supporting poor countries. 

Having China as a part of the ADB's lending portfolio also improves its ratings. The bank now has an AAA rating, but without China as a borrower, it may need more equity to keep its triple-A.

More broadly speaking, the engagement between the ADB and China is constructive to the region and the global community. The ADB is learning from China's experience how countries can develop through opening up and reforms, pragmatic policies to implement things like special economic zones, and trade liberalization in financial sector development.

Another topic Nakao touched on is China's economy. On Thursday, the ADB trimmed its growth forecast for developing Asia to 5.2 percent in 2019 and 2020, from 5.4 percent and 5.5 percent previously.

It cut its growth estimates for China for this year and the next to 6.1 percent and 5.8 percent down from the 6.2 percent and 6 percent announced in September, taking into account China-U.S. trade tensions and higher prices of pork cutting into consumer spending.

Nakao says it's very natural that Chinese growth is decelerating from a 10 percent growth before the global financial crisis because it's now catching up. "Six percent is not slow growth. It's very solid growth." He's not pessimistic about the future of the Chinese economy yet.

He's confident because he thinks China's growth has been supported more by private sectors and by incentivizing people to work hard and be more innovative. China should continue to keep a market-oriented attitude and also continue to open up. The exchange of ideas, trade, and services are the basis of growth in China. He sees Chinese economic growth as one of the very remarkable success stories of development and poverty reductions in human history. 

Nakao told Liu that since the growth of China's economy, its voice in the global community is now louder. And one aspect of China's influence is through the Asian Infrastructure Investment Bank (AIIB).

Nakao spoke highly of the AIIB and its leader Jin Liqun. He says there is no reason to be hostile to each other.

The ADB was founded in the 1960s with the mission of assisting developing countries in their growth. At the time, Asia was one of the poorest regions in the world, but since then, the area has witnessed miraculous development. As the region transformed, so did the ADB and its relationship with China. 

Nakao explains that in the beginning years, the focus of lending was industrialization and supporting essential infrastructure. It was more about the coastal regions to develop, to support the development of industries and the economy. Over the years, the focus was shifted to more inclusive issues like the environment, health, and vocational training to support the more impoverished region.

Speaking about his seven years at the ADB, he said he tried to make the bank more knowledge-based. Its equity has increased a lot, thus improving the bank's lending capacity. 

However, he warns it's not a quick and easy route to a more dominant Asia. "But it doesn't mean that this is the Asian century. We should continue to make efforts to strengthen institutions, contribute to the development of science and technologies, and be more responsible players in global issues like climate change."

"The Point with Liu Xin" is one of the main current affairs programs on CGTN. The 30-minute program comments on global news through Liu Xin's unique perspective. With two decades of experience as a news anchor and overseas correspondent, "The Point with Liu Xin" connects global audiences through social media, enhancing their participation and offering a comprehensive perspective on world events.

Schedule: Monday-Friday

Time (GMT): 1330, 2130, 0230

(If you want to contribute and have specific expertise, please contact us at opinions@cgtn.com.)