China set up a 20 million US dollar fund Thursday through the Asian Development Bank (ADB) in an effort to promote regional cooperation and poverty reduction of other developing Asian countries.

According to an agreement reached by visiting ADB president Haruhiko Kuroda and Chinese Minister of Finance Jin Renqing, China contributes 20 million US dollars to the fund at ADB.

The bank cited the fund as the first such fund to be established by a developing member nation of the bank and the first financed by China at any international institution.

Chinese Premier Wen Jiabao announced in May last year at a global poverty reduction conference in Shanghai that his country would create a fund with 20 million US dollars in donation to the bank.

China's proposal on the fund, reputed as the Regional Cooperation and Poverty Reduction Fund, won approval from the bank earlier this month.

According to ADB, all its developing member nations will be eligible for grants in support of the regional cooperation under the fund, although priority will be given to members of the Greater Mekong subregion and Central Asia Regional Economic Cooperation program.

Philip Erquiaga, principal director of the bank's Office of Co-financing Operations, acknowledged that the fund will "encourage innovation and learning in support of research, policy-related studies, capacity building and institutional development in developing member countries, and will pilot innovative approaches to knowledge dissemination and networking."

Over the next five years to 2009, the fund will inspire greater sharing of knowledge and experience on regional cooperation and poverty reduction across developing Asia.

It will assist countries in professionally managed, comprehensive benchmarking of their regional cooperation and poverty reduction efforts, learning from those with excellence in these areas, and helping to set appropriate performance measures and realistic targets for improvement. The ADB president and Chinese minister also signed an agreement Thursday on ADB's loans to a road project in Gansu Province, northwestern China, and a coalmine gas utilization project in Shanxi Province, north China.

The road project involves a loan of 300 million US dollars from the bank, while the coalmine gas utilization project a loan of 117 million US dollars.

Source: Xinhua