BEIJING — China’s top economic planner has announced the details of 1,043 proposed projects in which private investors are invited to participate through public-private partnerships (PPP).
Focusing on infrastructure and public services such as water conservation, transport and environmental protection, the investment needed for these projects totals 1.97 trillion yuan ($322 billion), according to statements posted on the National Development and Reform Commission (NDRC) website on May 25.
PPP refers to long-term cooperation between governments and private companies on projects that are mainly funded and operated by the latter and supervised by the former.
China is increasingly turning to PPPs to bridge a huge financing shortfall in infrastructure, which is considered a spearhead in the government’s bid to temper the economic slowdown caused largely by the ongoing property downturn. The NDRC did not specify whether the PPPs will be open to foreign investors.
It has designated 12 of the 1,043 projects as pilot schemes, to perfect policies over the next two years’ to March, 2017.
PPPs have existed in China since the 1980s, but the uptake of the financing mode has been slow.
Confronted with mounting local government debt and a pressing need to fund urbanization and cope with a rapidly aging population, China released two PPP guidelines last year.
Earlier this month, the cabinet said the government will streamline approval procedures for PPPs and that PPPs in public services will enjoy tax breaks and other financial rewards.
PPP project operators are encouraged to directly solicit money from the capital market, and social security funds and insurance premiums are allowed to invest in these projects, according to the cabinet.