PUBLIC-PRIVATE PARTNERSHIPS IN CHINA

The document examines the evolution of public-private partnerships (PPPs) in China, highlighting 2014 as a pivotal year due to a surge in official guidelines and a strategic shift toward market-led resource allocation. It identifies high local government debt and massive infrastructure needs for urbanization as primary drivers. However, it notes significant barriers, including political and regulatory uncertainties, poor risk allocation, and a lack of 'value for money' (VFM) evaluations. The paper recommends shifting the focus from PPPs as mere funding sources to tools for efficiency and innovation, advocating for performance-based specifications and life-cycle asset management to ensure sustainable development.

• The year 2014 is characterized as a potential milestone for PPPs in China due to the issuance of numerous official documents from the Ministry of Finance (MOF) and the National Development and Reform Commission (NDRC) to encourage private investment in public services and infrastructure.
• Two primary drivers for the promotion of PPPs in China are the critical levels of local government debt and the immense funding requirements for new urbanization. Local government debt reached CNY 17.9 trillion in 2013, approximately one-third of China's GDP, while the cost of providing infrastructure for an estimated 100 million new urban residents by 2020 was estimated at CNY 42 trillion.
• Private investors face significant uncertainties due to the predominant role of government, including instances where local governments do not respect agreements or where rapid rotation of mayors leads to unsteady political support.
• A major impediment to successful PPPs is the limited capacity of local governments to conduct proper risk analysis, feasibility assessments, and 'value for money' (VFM) evaluations, often leading to a 'blindness in selecting projects'.
• Current financing for the private sector in PPPs relies heavily on short-term bank loans, often with government guarantees, which may become a bottleneck given the scale of investment needed and new debt regulations.
• To maximize PPP potential, the document argues that authorities should prioritize efficiency and innovation over mere funding, utilizing performance-based specifications (PBSs) and a life-cycle approach to VFM that includes environmental and social criteria.

APA

Thieriot, H., & Dominguez, C. (2015). PUBLIC-PRIVATE PARTNERSHIPS IN CHINA. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/public-private-partnerships-china.pdf

Chicago

Thieriot, Hubert, and Carlos Dominguez. PUBLIC-PRIVATE PARTNERSHIPS IN CHINA. International Institute for Sustainable Development, 2015. https://www.iisd.org/system/files/publications/public-private-partnerships-china.pdf.

Wikipedia

{{cite report |last1=Thieriot |first1=Hubert |last2=Dominguez |first2=Carlos |title=PUBLIC-PRIVATE PARTNERSHIPS IN CHINA |publisher=International Institute for Sustainable Development |date=April 2015 |url=https://www.iisd.org/system/files/publications/public-private-partnerships-china.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{thieriot2015publicprivate, author = {Thieriot, Hubert and Dominguez, Carlos}, title = {{PUBLIC-PRIVATE PARTNERSHIPS IN CHINA}}, institution = {International Institute for Sustainable Development}, year = {2015}, month = apr, url = {https://www.iisd.org/system/files/publications/public-private-partnerships-china.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }