The third thing we come to appreciate much more is that sometimes the most valuable things that come from interaction with the World Bank is not money for investment but the things that developing countries are able to learn either from the experts of the World Bank or because the World Bank provides a bridge to other experts. When I asked Chinese officials when I was in China last October: "what is the most useful thing you have got from the World Bank?" ?a one striking answer is: "it is not money. We learn through the World Bank how important it is to have a very good accounting system". The World Bank helped set up training programs in China for that.

It is the exchange of knowledge and I think one of the reasons why China has been so successful in the last 25 years is that China has been extremely good at getting the best knowledge available from the outside world and not being uncomfortable with learning from other people. The World Bank is one of the mechanisms China has found useful for learning from the outside world. It works well when you have people who want to learn. So it works better in some African countries better than others and some Asian countries better than others. I was in Pakistan last August and I met with a woman in a small village. I asked her a question if Pakistan could do something. She said, "Japan has done it, China has done it, why can't Pakistan do it?"

Correspondents: China is lending to many African countries. What is your opinion about that?

Paul Wolfowitz: The issue isn't China's lending, India's lending, the US's lending, France's lending. We have just been through a particular big debt cancellation exercise for many of the world's poorest countries. And what everybody is concerned about is that now that those countries don't have any debt anymore, they may go out and borrow too much all over again, and they'll become heavily indebted countries all over again. It is not the responsibility of any one lender to prevent that, it is the responsibility of lenders as a group. I don't single out China specifically ¡§C it could just as easily be the US or any number of other countries that lend too much.

We have something now called the Debt Sustainability Framework which was worked out by the Work Bank and the IMF. The framework gives guidance on how much is a reasonable amount for a poor country to be borrowing. We now need to work with the different lenders so that when countries hit the yellow zone and before they hit the red zone, the lenders start to figure it out. The key to that is sharing information.

Correspondents: You said China is no longer a poor country by the World Bank standard. Does China still borrow money from the World Bank?

Paul Wolfowitz: China does still borrow money from the World Bank, but it no longer borrows money from IDA, it borrows money from IBRD, which is the International Bank of Reconstruction Development which lends at favorable terms which are slightly better than other commercial banks.

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