“Public goods and services still require a large investment in which the government cannot be the only player,” Premier Li Keqiang said in discussions on public-private partnership (PPP) during the State Council executive meeting on May 13.
Goods and services, the promotion of joint government and social capital as a key ingredient in stabilizing economic growth and reform of the economic structure will serve as a strong engine to drive investment growth, he said. In addition, the Premier said, effective use of social capital can also be considered a reform.
Public infrastructure in central and western regions lags behind some countries that are at the same development level as China, the Premier noted. In the past, most investment in public goods and services came from the government, but this, the Premier said, “is unsustainable’’.
Instead of imitating others, the Premier added, we must promote the joint use of government and social capital with Chinese characteristics by learning from foreign experience regarding PPP. The literal meaning of PPP may be public-private partnership, but in China what we are promoting is a version that not only includes private capital but also capital from State-owned, shareholding, and mixed-ownership enterprises, he noted.
Social capital is not invited to fill the fiscal gap, the Premier pointed out. Instead, by the joint use of government and social capital, it will be activated to supply public goods and services, which, at the same time, will prevent any potential loss or waste of government assets.
At the end of the meeting the Premier emphasized that the new mode is in its early stages and problems still exist, which means greater focus is required to perfect it in accordance with local conditions.