The World Bank unveiled an ambitious plan of lending to China that highlights environmental destruction and social inequality as "critical" challenges for the booming nation.

The plan envisages annual assistance of 1.5 billion dollars for the next five years, making China the global lender's biggest aid recipient along with India.

Skyscrapers rise above Beijing as the morning sun rises. The World Bank unveiled an ambitious plan of lending to China that highlights environmental destruction and social inequality as "critical" challenges for the booming nation. [AFP]

The money would be devoted largely to the inland provinces that have lagged the breakneck growth enjoyed by coastal cities, in accordance with Beijing's own plan to spread the boom more widely.

"The new 'Country Partnership Strategy' recognises clearly that helping China to strengthen its economy, manage its resources and environment, and improve governance, are important not only for the Chinese people but also for people all over the world," World Bank president Paul Wolfowitz said.

Despite its startling progress of the past two decades, China still has more than 135 million people surviving on less than a dollar a day.

Many observers say that without a fairer distribution of income, and a serious effort to protect the fast-degrading environment of its cities, China risks losing some of its gains.

David Dollar, the World Bank's country director for China, said that with 10 million people leaving the countryside every year to hunt for work in the big cities, the pressure on strained urban infrastructure is intensifying.

"City life is much more energy-intensive," he told reporters. "It raises whole new environmental issues. So urban management is a critical issue for China."

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