People's Daily interview with Michael Klein

Following is an exclusive interview with Michael Klein, Vice-president for Private Sector Development jointly for the World Bank and the International Finance Corporation (IFC) as well as Chief Economist, IFC.

Yong Tang:In Doing Business in 2005, China's minimum capital percentage in starting a business is 1104.2% of per capita income while the number for USA is 0.0. Why is the number for China so high?

Klein: Traditionally, a number of countries had required, when the business was set up, that new business owners should deposit a certain amount of money to establish seriousness of the enterprises. As time went by, most countries have decided that this doesn't make sense at all and that minimum capital requirements are not needed. China is one of the countries that still keep the minimum capital requirements and the minimum capital percentage of income is actually relatively high. We feel that this is one of the easier reforms that China could undertake if they have interest. That is to say, drastically reduce or even completely abolish the minimum capital requirement.

Yong Tang: Maybe it is a better guarantee for ordinary consumers if new business owners are required to have minimum capital to establish a business?

Klein: If you want to set up a business, you should have some capital anyway, but the government has no business in requesting people to put up money at the very beginning. The only purpose of business registration is to make sure who is this person and identify with his social security number and tax number. That's all needed. Then they can go out. If they want to invest or do something, they have to have money. They have to bring it themselves or have to convince other people to give it to him. Other people will not typically give the money to him unless they trust him. For the government, the minimum capital requirement is not really necessary.

Yong Tang: If China's requirement for the minimum capital becomes zero, I will start a business too when I get back to China.

Klein: Excellent!

Yong Tang: Two new indicators have been developed in this year's Report, registering property and protecting investors. Why do you add them?

Klein: Property is an issue in two ways. For a business to operate, you need a piece of land. And many businesses need pieces of land to operate on. The ability of registering property is to see that this is my land and what I can do and what I can not do with it. It is very important to give certainty and clarity to the business owner. The second issue for small business owners: if you want to have access to credit, in most systems, you need to collateral. You have to convince the bank there is security there. If you have a property, then you can put the property to the bank and put mortgage on it and raise capital that way. So for these two purposes, access to property, clarifying titles and registration and so on are important.

Yong Tang: How do you mark China's performance in improving the business regulatory environment and promoting the private economic sector?

Klein: Overall I was surprised for how well China comes out. China's performance was very poor 26 years ago in 1978 when the Gang of Four just stepped down and Deng Xiaoping came in.

Yong Tang: Did you have such a similar report in 1978?

Klein: No, but China has witnessed completely different economic systems, from planning economy to the market-oriented one. So nowadays China compares reasonably well with the best of Latin American countries. Chile is one of the leaders in Latin America. The indicators we see here for China are relatively similar to those of Chile and India. That surprised me. I would have thought China has still more complicated procedures, less market-oriented legal infrastructure than it appears to have build up. So China has clearly made a lot of steps and China has still a lot of way to go because Chile is the best among the complicated bunch. Many other Latin American countries are really bad. China has advanced quite a lot overall.

Yong Tang: What are those advancements?

Klein: When we look at the number of days for registering property and the number of procedures for China, it is not bad. The number of days taken to start a business is also not bad. Of course there are significant steps that need to be taken, but it is still not bad. When it comes to the hiring and firing workers, overall the flexibility is not bad. Where China is weakest in the indicators is access to credit. The ability to protect creditors against losses is relatively weak. The credit information system that allows creditors to find out who intend to pay off his loans and who does not is weak. The information systems and creditor protection is relatively weak.

Yong Tang: But people say Chinese banks are lending too much?

Klein: But not to private companies. It is heavily driven by political directions. The government is aware that one of the key issues is to build up a sound banking system and a sound legal infrastructure. Let the banks more and more decide on the basis ofeconomic returns and less on political grounds.

Yong Tang: What is the World Bank doing and will continue to do in order to help China remove obstacles to growth and improve the business environment?

Klein: We are happy to work with the Chinese government on making reform proposals, bringing ideas to the government from other countries. We are currently involved in Sichuan Province. In Chengdu, we have a project to help improve the system of secured transaction so that business owners could secure the credit and the lending. That is the thing we tackle over there. The other thing we have tried and will continue to try is to build up a credit information bureau in China. Chinese government has interest in both. At the moment the security lending work is going ahead while the work on the credit information bureau is going more slowly.

Yong Tang: It seems that the World Bank produces a number of reports every year. How do you guarantee the quality of these reports?

Klein: In this particular report, we work with a network of 3300 partners, mostly lawyers in 145 countries. We have detailed questionnaires. So it is very transparent what the questions are. They tend to be very clear and direct about what laws and what regulations exist. The partners in the firms sign off on the data and we cross-check in the conversation to see if they make sense to us. We publish them after all these investigations. We also have a complaint procedure. If somebody thinks it is wrong, he can write to us or call us. Last year on the first report we have about 60 complaints.

Yong Tang: 60 is a lot?

Klein: If you consider the total is over 3000 data, 60 inquiries are not that much.

Yong Tang: How did you respond to these complaints?

Klein: We will look at it and we investigate. We see what the governments are saying and we find out where the mistakes are. We found in 50 cases we were right and in 10 case we were wrong out of those 60. For the wrong, Then we correct them on the website. The hardcopy will not be changed. So there maybe some mistakes on the hardcopy. The statistics will not be ultimately correct. But there is a clear cut questionnaire and there is a procedure where our partners and firms will review and we will review again and sometimes mistakes still slip through. We will report mistakes in the next report. So in this year's report we said we made some many mistakes. Among 3192 data 0.3% of them have problems. Human beings make mistakes. We think the best thing is the system that acknowledges the mistakes could be made and allow them to be corrected.

Yong Tang: How about this year's reactions to the report?

Klein: The reactions are better and more positive than last year. It is the most popular report of the World Bank. It has unprecedented effect on policy makers. To give you an example. Our boss, Peter L. Woicke, Head of International Financial Cooperation( IFC), just came back from a trip to Indonesia today. The President of Indonesia, by himself, unprompted, talked about Doing Business in 2005 Report with my boss during the meeting. I went to Tokyo one week ago and happened to meet the President of Nigeria. He said he had a copy of this report and had tried to set up a committee to look at the issues raised in the report. It has raised the level of awareness and interest in reform that is pretty much unprecedented in what I have seen.

Yong Tang: Someone said the World Bank is becoming more and more important not because of its loans but because of its reports like this one. International investors often make their investment decisions partially according to these reports. Can the governments do something to flatter you so that you would describe a more favorable picture for the countries involved?

Klein: Good relations are not an issue. Good policy is an issue. The important thing is whether the countries are doing the right thing. It is true that more and more countries, including China, have access to capital markets and they need less and less the money from the World Bank. One of the key strength of the World Bank is that it operates in so many countries and it has access to information to decision-makers. When we are capable of transferring best practices from one country to another and help them understand how they fare and what they could do, then we can be very powerful. To be able to do that, we should be credible. Credibility is everything in our business. Yes, good relations are good to be able to have access to information but good relations by themselves are not worth anything without underlying good policy.

Yong Tang: A report released recently by the World Bank said the policies adopted by Chinese government to cool down the economy are effective. China's economy will grow at 9.25% this year and about 8% next year. According to the report, the possibility of a hard landing is very unlikely. You also once said during an interview with Dow Jones Newswires this April that despite some problems in some sectors, China will be able to make a soft landing. Do you still think so today?

Klein: At the moment I have no particular new opinion. Whether or not Chinese economy will have a hard or soft landing is extremely hard to predict. It seems that the administrative measures taken by the government may have some effect. But Chinese statistics are very difficult to interpret. It is clear that Chinese government is struggling with the right policy mix. On one hand, it is clear market-based instruments have not yet be developed to the point that could stir the economy. So the government is taking some steps to liberalize the exchange rate regime. On the other hand you have to do some administrative things. But it is still very possible that the economy will have a soft landing. Having discussions of hard landing and soft landing is quite complex. After all we are not talking about crisis.

Yong Tang: How do you think of China's recent move to raise the interest rate? Do you think Renminbi is undervalued?

Klein: Chinese authorities are quite aware that as time goes by the market oriented instruments for the monetary policy will have to be introduced. Somehow liberalizing the interest rates means pretty more flexibility in financial sector combined with good regulations and supervision. Step by step the government is moving there.

Yong Tang: What is the biggest risk facing China's banking and financial system? As an economist, what suggestions do you have about China's ongoing financial reform?

Klein: For a long period of time the most important thing is how the capital gets allocated in China. it is allocated to the most productive users or not? Traditionally China has financed the state-owned enterprises, many of which are not performing very well. Chinese banking system has significant amount of non-performing loans and the government is very aware of this. How to work this out, how to take care of the problems of the past is one problem. Very much linked to that is how to make sure in the future you make better loans. As long as you have a bad past, bad borrowers could not easily go to the good borrowers. How to come out of this syndrome is the biggest problem.

Yong Tang: Do you think China is a market economy or not?

Klein: There are a lot of political discussions about that. Whether people are satisfied with how much market economy China is, China is clearly moving towards market economy. We are very happy to help China on that way.

Yong Tang: A diplomatic answer?

Klein: Yes.(laugh)

Yong Tang: What should China do in order to be granted market economy status by major western economies?

Klein: China is negotiating with some other countries with the status. I am not aware of what the detail requirements are. Overall one of the key challenges for China is the liberalization of the financial system. The introduction of more market-oriented ways of dealing with exchange rate, interest rate etc is important. But one should be careful: in doing this lots of countries have suffered from financial crisis. But at the end of the day it has to go that way. Whether China is able to combine liberalization with appropriate prudential regulations will be a big challenge.

Yong Tang: In 1997 World Bank released a report named China in 2020. The report predicted that by 2020, China will catch up with Portugal, that means our per capita GDP will reach 10,000 Dollars. Is this prediction still valid?

Klein: Yes, I think China will do better than Portugal by then.

Yong Tang: The World Bank President Wolfensen said this May that, After 2017, China will surpass America and become the world Number One economy. Are you the same optimistic?

Klein: It depends upon how we value this. Countries that have lower per capital income often tend to have higher purchasing power. If you value China's economic wealth at current exchange rate, this is pushing it down. If you evaluate China's economic wealth at purchasing power parity, this will probably happen. Some goods are traded in the international markets so they have the same price basically all over the world. But some goods are not traded in the international markets like local services. A standard example of this is haircuts. You don't export haircuts. The relatively price of haircuts in China is probably much lower than that of the USA, Japan or Europe. If you adjust these relative price difference, Chinese are actually richer.

At the moment China's official per capita income is a little bit above 1000 Dollars. Add the purchasing power parity, adjust the exchange rate, China's per capita income should be 5500 dollars. This is an adjustment to reflect the actual purchasing power that Chinese people have because the services there are actually cheaper than in other countries. So add the purchasing power parity-evaluated exchange rates, China is now the world Number Two economy anyway, larger than Japan, just behind US. By 2020, if things go the way that has gone in the recent decades, China will be bigger than the US.

Yong Tang: once as an economist on oil and gas at Royal Shell, how do you think of impact the rapidly rising oil prices bring to the world economy?

Klein: I was surprised. The big surprise is the demand. The supply side is more or less as what I expected. But the increased world demand for the oil is bigger than what I expected. Many other economists are surprised as well. A lot of that demand is coming out of China.

Yong Tang: So some American media claim China should be held responsible for the present oil price upsurge.

Klein: Why should China be responsible? It is a good thing. China is growing fast. It is good for China. At the end of the day, it will be good for the world. But the oil companies have to produce a lot more oil to bring down the prices again.The industrial programs in the world have not expected such great demand. So it needs some time for the industry to adjust and become comfortable with the assessment if the demand increase will continue at that level or not. At that time the oil price will come down again. How long will it take? I don't know. It may take several years.

Yong Tang: The World Bank has started its operations in China since 1980s. How do you think of the cooperation between the two sides?

Klein: I hope the Chinese government is happy with what we have done. From the World Bank point of view, Chinese government is one of our most interesting clients. Chinese government is interested in learning, absorbing and experimenting with ideas that one brings. Chinese government is one of those governments that know how to use the World Bank group. It is always good to have a client who has good opinions. China is a demanding client and you always do better with demanding clients.

Yong Tang: Since 1980s China has been granted 35 billion us dollars of loan by the World Bank. This year The World Bank will offer China 1500 million Dollars of loan. However, the amount of loans offered by the World Bank to China has reduced substantially since the fiscal year of 2000. Does this have anything to do with China's rapid economic development in the last 20 years? Is there any World Bank policy changes toward China?

Klein: The biggest thing is because that China has graduated from IDA. The World Bank has two windows for lending, one is very low-interest long-term loans, it is called IDA, international Development Association soft loans. Another is standard International Bank for Reconstruction and Development (IBRD loans) . Fortunately China has become too rich so it is no longer eligible for soft loan windows. World Bank terms and conditions are no longer so attractive. Chinese government today has good capital market access at lowest price in the international market. Also Chinese government has about 400 billion Dollars of external reserves. So Chinese government doesn't need that much money any more. So altogether the lending volume has come down. And as you said before, China is one of the cases where we are moving from a banking relationship to an advisory relationship. So we sell products like Doing Business in 2005 to China.

Chinese government is using the World Bank to improve certain practices and procurement, say, in highway construction. Chinese government is using the World Bank because the bidding practices and supervision practices that the World Bank brings. Chinese government wants to spread that inside the country. So China wants to adopt some of these supervision mechanisms otherwise China could not bother to borrow from us.

Yong Tang: How do you make sure these loans will not be misused during the whole process?

Klein: That is one of our big challenges. First, we try to assess with our counterparts what the loan is for, try to design a good program, supervise the loans during the implementation to see that there is no financial fraud and the actual implementation of the project goes well. It is our supervision and monitoring arrangements which hopefully protect us against the misuse.

Yong Tang: Do you have some supervisors installed from the beginning to the end?

Klein: Yes, We have supervision teams that continuously monitor the programs and visit the projects.

Yong Tang: Have you found any misuse cases so far?

Klein: Sometimes misuse happens. We have a case in Kenya where our investigation is going on. For China, I am not aware.

Yong Tang: How about Iraq? A World Bank report said it is the most corrupted country in the world today.

Klein: We are not lending to Iraq. I am not aware of this report.

Yong Tang: To some degree the World Bank and Chinese government are doing the same thing: both are serving the large number of poor people, both are working hard to curb the polarization of rich and poor. How do you think of the work done by Chinese government in this regard?

Klein: Overall I think China is one of the countries which have harvested massive poverty reduction across the country. Several hundred million people have came out of official poverty line over recent decades. There is no other country in which such massive poverty reduction has ever happened in recent history over such a short period of time. At the same time Chinese government is worried about the distribution issue inside the country. Some of the remote and rural areas are still stucking in the poverty while there are increasing incomes in other areas. Also the problem of migration etc. So the current government seems more interested in making sure the distribution of gains from growth could be better. Overall Chinese government has made major progress in poverty reduction.

Yong Tang: Does the World Bank have any plan to help China overcome such a wide income gap?

Klein: Yes, much of World Bank group programs in China are directed in social programs and programs that suppose to improve the quality of overall growth rather than pure growth.

Yong Tang: In this October the World Bank has been awarded by Chinese government the Prize for Poverty Reduction. How do you think of this Prize?

Klein: This is a very nice compliment. It is very gratifying to have this kind of recognition. I am very pleased about this. Dealing with the questions in the Report is one of the most important things for poverty reduction because this is tend to what is a sustainable growth. Sustainable growth will happen only when there is a solid body of firms entering into the market, having access to capital, to be able to grow and their property rights are respected, property can be collateralized. Obtain credit etc.

Only when these things happen will we have sustainable growth. China, as we discussed before, now looks sort of like Chile in all these indicators and the sustained nature of China's success has to do with attention to these agendas. And by the same token, it is clear China can do a lot more, to improve, say, the access to credit. We are very happy to help with that. That will increase incomes and create jobs and create taxes that allow the government to have some redistribution programs.

Yong Tang: World Bank officials keep saying that poverty reduction is not solely an economic issue, it needs developed countries to make more effort. How to understand this point?

Klein: There are two points here. One is that in many countries there maybe some political influential groups either inside or outside the government who don't like this kind of reforms necessary for sustainable growth. In particular well protected incumbent firms or some politicians may feel threatened by new firms coming in and having competition. But competition is the most important thing to drive productivity growth. So you may see political opposition to these reforms for this reason. In that sense all this reform process and poverty reduction is a political business.

The difficult problems are really political, technological problems are not very difficult. You can minimize the capital requirement to start with. We can have a technical discussion. We can decide to abolish the old things and make new laws. It is not very complicated and costly. So all the real difficult things are political.

When it comes to the developed countries, again there is a typical issue: market access. Why do the developed countries make it difficult for the developing countries to have access to agriculture markets and the steel sector? That protectionism coming from the developed countries sometimes stand in the way. That is explained by political resistance to compete fairly with products from other markets.

Yong Tang: It seems to me that the World Bank is a spokesperson of the poor. Do you have any conflict with American government here?

Klein: Yes, we have conflicts on trade policy in particular. The World Bank, for many years, has taken the view that providing greater market access to the developed countries, not just America but also Europe and Japan, would be very beneficial for the developing countries. Several hundreds of billions of gains will be obtained if the Doha Round of the trade negotiations at the moment were to be successful. The World Bank has been pushing and arguing that agriculture trade liberalization will be a good thing.

Yong Tang: But the officials at the White House sometimes will be unhappy with what the World Bank leaders say?

Klein: The most clear-cut disconsent were from European parties. There are a little bit debates last year between World Bank and some European countries because of the World Bank's position on agriculture trade liberalization. It was highlighted in a World Bank statement: the average cow in Europe subsidy worth about 2 dollars a day while so many people in the world live with less than one dollar a day. The Chief economist of the World Bank made that statement. There are vigorous complaints from Europe about that. Yes, there is unhappiness and very testy periods.

Yong Tang: But the World Bank is headquartered here in Washington DC?

Klein: Yes, but World Bank is a multinational organization and European countries altogether have a higher share in the Bank group than the US. In any case the position of World Bank has taken on agriculture trade liberalization and doesn't care with this country or that country. We just look at the infrastructure and make our report.

Yong Tang: I have noticed that the World Bank has been undergoing fundamental role changes. It is changing from a bank of loan to a bank of knowledge since late 1990s. Can you name a few examples to illustrate the importance of this change?

Klein: Here, example No. one (Doing business in 2005). As we have discussed, some countries like China have market access to the capital markets. They no longer have access to the subsidized money from the World Bank group. So the interest is in other things, say practice sharing. Our bank has done that before to some degree, but more and more in recent years, the bank has been concentrated on finding ways of collecting knowledge, the best practices and conditions across the countries and make it available in the formal advisory services to the governments. Doing Business in many ways is probably the most single successful product so far in this direction.

Yong Tang: What does the word Knowledge mean here?

Klein: Ultimately they are things that governments want to know to help improve their economy. So it can be any type of economic problems that we touch upon. If the governments want to know: How can I get more creation of small and medium size enterprises in my country? How can I create more jobs? What is the experience of other countries? Which kind of policy changes you may have? What works and what doesn't work? Then we can say, these countries are like this and these countries are like that. This has worked and this has not worked. Given China's situation, it may be useful to try this instead of that......this could be any area policy. It could be health projects or education or infrastructure or reform of legal systems. All these topics are about learning from other countries to improve their own system.

Yong Tang: Are these reports free?

Klein: This one copy cost about 35 dollars. It is not expensive for a government with billions dollars of reserves.(laugh)

Yong Tang: It seems that you have been to China this April. So far how many times have you visited China during your stay at the World Bank?

Klein: Three times.

Yong Tang: What is your personal impression about China?

Klein: Last time I have been to China ten years ago. I have been to a few places in China only. I visited Beijing ten years ago and this year so there are major differences.

Yong Tang: What makes you most surprised?

Klein: The quality of building has improved a lot, The number of cars on the road has increased. Traffic jams have increased. Ten years ago Shanghai Pudong is just so so. Today you have a very prominent skyline in Pudong. In discussing with Chinese authorities, there is a clear sense that the government wants to move toward more market oriented systems. There are a lot of debates about how and when and who wins and who loses and how can we arrange things in such a way that works, but a sense of basic direction is there. Very few people doubt that the government has a fundemental interest in moving to that direction. That is not normal in many countries.

Looking down from the hotel in Pudong, right there is Starbucks and Hagendas. Kentucky Fried Chicken in Chengdu is very prominent. I found that very surprising.

Yes, tourism within China and outside China. The number of Chinese tourists are flooding around. The number of high-rise hotels in China are catering to them.

I am German.Recently I went to Frankfurt. Germany has problems with its labor markets. Too many unemployed people there. So they are trying to liberalize the labor market to make it more flexible so that business has more incentive to hire people. So we have a lot of protests against that. Because protection against firing has been reduced, German Communist Party is a little bit more prominent now. In Frankfurt, I saw a demonstration organized by the Party. About two hundred people raised flags and beated drums and sang Communist songs. A bunch of Chinese tourists stood there watching. It is an irony,isn't it?

Yong Tang: Why did you choose to work in the World Bank ?

Klein: The topics are interesting. The purpose sounds sensible.

Yong Tang: But I suppose you earn much less than before?

Klein: I earn much more than before. I didn't earn much when I was in a university. Maybe I could do something else and earn even more, but I am earning enough now.

Yong Tang: Do you think what is the most exciting thing working here?

Klein: The most exciting thing is a combination of two things: Fist, you have exposure to all the different countries and you know the differences. Second, you are able to work with teams, like the team who works to produce this Report. So a combination of interesting people and dynamic teams plus exposure to all these different country situations.

Yong Tang: The World Bank looks like a multinational cooperation, just like, say, Coca Cola. It has about 10,000 staff members£¬among them around 3000 have doctorate degrees and 2500 are economists. The World Bank employees come from over 160 different countries. It is difficult to manage such a huge organization with so many brilliant brains. How do you work together with Mr. Wolfensen to keep the World bank going?

Klein: Yes, the World Bank is just like a multinational cooperation. But one of the biggest differences between World Bank and private sectors are: no private organization in the world has so many PhDs as we do, so the average education level of World Bank employees are extremely high, higher than any organization of this size. Coca Cola would not be well advised to have so many PHDs as we do. This is a nice thing because we are able to work with people with interesting ideas, but it is also a management challenge.

The second challenge is the nationality mix. There are some multinational companies that have many nationalities but in one country it is one nationality and in another country it is another nationality. When you come to the headquarter, there is no organization in the private sector that has so diversified staff as the World Bank has. I think the diversity side of it is actually a strength. It is nice and interesting to be in an enormous institution with so many different people with different perspectives. It may pose some management challenges, but I think they are not major at all.

It is much more a challenge to deal with all the PHDS. If you have too many people who are clever...the World Bank is a place with so many areas to be worked on and some many countries to be discussed. Each person in the World Bank has some monopoly. 3000 PHDs all have their own monopoly. How do you manage all these people? If you want to manage somebody, you have to second-guess to some degree: what they are doing? Where is the direction? That is very hard. On the one hand you have to provide a lot of room for initiative. On the other hand you should have some basic standards and approaches so that the whole things stay together a little bit. That is the biggest challenge. But I think people like Mr. Wolfensen have exceptional intelligence and intuition that one needs to make such organization hang together.

Yong Tang: Do you have any conflict with any other high-ranking officials here?

Klein: Me? Never. Just like any other organizations. Some people are getting very well and some not so. I just hired a new young professional here. We have a trainee program called young professional program. The professional, much to my delight, had the same experience as I had when I came here. The World Bank is an exceptionally open organization. The degree of getting access to people, getting answers from people, getting people willing to talk to you and sharing information is exceptionally high here. There are always some people who don't like some others. But in general the openness and the ability to share is very high compared with other places.

Yong Tang: You had worked at Royal Shell. What is the biggest difference between working at World Bank and Royal Shell?

Klein: Somewhat different. No. One, the area topic is different. No Two, in the Royal Detuch, when you are operating , the groups are much tightly organized. When you come to the headquarter of Royal Shell, you start having the feeling like working at the World Bank. But in the bottoms of the organization, you have different feelings. Some people said the World Bank has the feature of university. It is somewhat academic. This is also a challenge. You have to combine academics with implementation.

Yong Tang: Are you still feeling happy with your work despite so many challenges?

Klein: I think I would be unhappy without these challenges. The challenges are what make me happy.

Yong Tang: Do you have any hobbies such as sports and music?

Klein: I like travelling and sleeping.

Yong Tang: Do you travell a lot?

Klein: Yes, between a third and half of my working time.

Yong Tang: Free travelling?

Klein: Yes, I don't have to pay. But they are not vacations.(laugh)

Yong Tang: Some American newspapers recently claim that World Bank President Wolfensen is going to retire soon and American Secretary of Sate Powell will replace him. Can you confirm this report?

Klein: There are always rumors from the press. I don't know better. We will see. Are they true? Are they not? Nobody knows. Anyway, the official term of Wolfensen will run out next year. There will be a process to appoint the new President. It maybe Wolfensen, it may be somebody else. We will see.

Yong Tang: Is there anything here in the World Bank purchased from China?

Klein: Anything these days are purchased from China. (laugh)

Yong Tang: Many Chinese companies want to do business with World Bank because the Bank has a lot of projects and programs. How could they do so?

Klein: There is a webpage on the World Bank website www.worldbank.org. From there companies can find out information about how to become suppliers to the World Bank.

Yong Tang: Would you like to write down a few words of compliments for the readers of People's Daily, People's Daily Online and The Global Times?

Klein: Handwriting? My English handwriting is awful, looks like Chinese characters. (laugh)

Anyway, here is my compliment to Chinese readers: The World Bank hopes to help all Chinese people move out of poverty within the next generation. Michael Klein.

Yong Tang: Thank you so much for the interview, Dr. Klein.

Klein: My pleasure.

AutoBiograph:

Prior to this, he was Director of the joint Bank/IFC Private Sector Advisory Services Department covering advice on investment climate, corporate governance, corporate social responsibility, privatization transactions and foreign investment. He was Chief Economist of the Royal Dutch/Shell Group (1997-2000), where he advised on worldwide economic developments and industry issues. He joined the World Bank in 1982 as an economist on oil and gas projects, trade and industrial policy, financial sector reform and macro-economic analysis. In 1991 he became head of the unit for non-OECD economies at the Economics Department of OECD. In 1993 he re-joined the World Bank and became Senior Manager, Private Participation in Infrastructure, focusing on issues of market structure, regulation, privatization and project finance in the telecommunications, transport, energy and water sectors.

Mr. Klein studied in Bonn, New Haven and Paris and received his doctorate in economics from the University of Bonn, Germany.

By Yong Tang, People's Daily correspondent based in Washington DC