CHINA needs an effective evaluation system to better evaluate the loan projects it applies for from international financial organizations.

For more than 20 years, China has been benefiting a lot from loans granted by international financial organizations, mainly the World Bank and the Asian Development Bank.

By last year, the sum of the loans that the international financial organizations promised to China had totaled US$60.5 billion, about 70 percent of which is used in developing Central and West China.

However, the lack of a scientific way to evaluate the projects has prevented China from effectively learning from past experience.

"In the past, China sometimes applied for loans without paying enough attention to the actual use of the money," said Liang Ziqian, an official of the Ministry of Finance.

That resulted in the failure of some projects and the inability of certain local governments to pay back the loans on time.

Zou Ciyong, a senior official of the Ministry of Finance, said a future evaluation system should focus on determining the loan repayment ability of the borrower before the latter can apply for a loan.

Zou was speaking at the Asia-Pacific Finance and Development Center in the Shanghai National Accounting Institute on April 9.

Indeed, it's the quality of loan projects, rather than the amount of the loans, that matters most to China. It's time to repudiate "the more the better" mentality, if China is to build up its reputation as a reliable and trustworthy borrower.