China Intensifies Efforts in Promoting Development of Public and Private Partnership

China Intensifies Effforts in Promoting Development of Public and Private PartnershipThe Chinese government is intensifying the efforts in promoting a more standardized and rapid development of public and private partnership for projects in the public sector. The efforts are also part of the government’s plan to encourage private investment across the country. New measures are introduced to encourage partnerships or PPP especially for public services as decided at the State Council meeting that was chaired by Premier Li Keqiang.

The country saw progress in promoting PPP for the past two years, through a institutional barriers still hinder PPP development. The country needs to work hard in addressing these problems in promoting PPP as government functions overlap and policies and legislation are not ready. And solving them can the country drive for more investment effectively. Taxation policy is tailored to suit the financing system better and solid research prior to PPP projects implementation. Li also pushed the idea that PPP development at a State Council meeting that suggested that doors must be open to social capital, especially private capital.

Private investment growth was slow for the first half of the year,which triggered concerns from the central government departments. And as the State Council finished an examination with the reasons for such slowdown across the country from May to June and it was noticed that several private companies are reluctant in joining PPP projects in fear that their interest are affected. During moment that private investment slip and then PPP serves a substantially in driving private business development.

Another issue on PPP is the possible imbalance market access fo State owned enterprises and private investors as local government work better with state owned enterprises than private investors. Furthermore this leads of the demand for regulations to shore up PPP development. The Ministry of Fiance have already announced the procedures of PPP legislation and a draft is circulating in all department  for consultation. There are more than 600 PPP projects implemented and 39 percent of the signed projects have private business partners.

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