China Introduces New Financial Mode to Fund Public Service Projects

China Introduces New Financial Mode to Fund Public Service ProjectsChina is hoping that the new financial mode they call public private partnership that funds costly infrastructure and public service projects to work out. The public private partnership is a long term cooperation between the government and a private company that are doing projects that are funded and operated by private companies and supervised by the government.

During an executive meeting, China’s cabinet stated that significance of public private partnership and released new measures that will encourage more public private partnership projects in the fields of environmental protection, transportation, old age and medical. Public private partnership existed since 1980s using public money and government bonds as the main financing channel.

Furthermore confronted with a mounting local government debt and a need to fund urbanization and cope up with a rapidly aging population, China has released to guidelines in hopes of leveraging in more private capital. The government also said that it will be streamlining approval procedures for public private partnership projects and give them adequate land to use. Although no time line was provided or any details this projects in public services will enjoy tax breaks and financial rewards.

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