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Interpretation of Research Results of PPP Research Center of PKU in 2019

NOV . 24 2019
Peking University, November 19, 2019: On November 12th, the second annual conference of "Global PPP 50" Forum was held at Yingjie Overseas Exchange Center of Peking University. Several reports are issued to present the results of the research on Public-Private Partnership (PPP) in China.
1. Peking University: China PPP Index
Peking University China PPP Index is the first comprehensive report reflecting the PPP development index in China. According to the report, China’s overall PPP index in 2018 was 77.13, 1.93 points up from 75.2 in 2017, illustrating a stable growth in our market performance and capacity of the supply-side. The report points out that the security systems provided by local administrations, social participation, and the overall operation of PPP market have all witnessed remarkable progress.

Provinces are divided into either the recommended group (A++, A+, A) or the caution group (B+, B). Sichuan, Shandong, Guangdong, Beijing, Jiangsu, and Henan are rated A+, and Guizhou, Zhejiang, Anhui, Hubei, Fujian, and Yunnan A.

Finally, the report recommends enhancing the legislation and enforcement of relevant laws, strengthening the role of the government in PPP development without disregarding joint efforts from multiple perspectives, intensifying financial supply-side reform, ensuring the quality of incoming projects, and improving the risk allocation mechanism.

2. Peking University, The Bluebook: A Report of PPP Market in China
This bluebook, revolving around “innovation”, analyzes new problem and cases, interprets new policies, and proposes new models.

The research points out that the current governmental surveillance focuses on improving the efficiency of government investment, standardizing the investment process, and stimulating the enthusiasm of social capital. PPP model also has significant developmental potential in emerging fields like cultural tourism, ecological regulation and so on.

The bluebook also acknowledges that drastic difference between the political and economic circumstances of China and those of western countries leads to their difference in the way how PPP develops. Therefore, theories shall be adjusted to the status quo and unified legislation shall be issued.

In 2019, the PPP market in China continues to advance steadily. Thus, another golden opportunity for the development of PPP in China is right on the way.

3. Historical Evolution and Development of Global PPP based on a Comparative International Perspective
Knowledge of the historical evolution and development of PPP in typical countries is of great importance. This report adopts a comparative international perspective to explain how the PPP model works in developed countries, developing countries, and new emerging markets in order to promote its sustainable development.

It is suggested that though PPP model is understood and conducted differently in diverse countries and regions, there is a constant focus on the long-term cooperation between governments and private capitals. The Belt and Road Initiative will become a main stage for global PPP cooperation. Under this circumstance, this model is faced with high political, legal, and social risks, so the issue of legislation and innovation is still worth of concern.

4. Insurance Funds to Drive Efficient Financing of Public and Private Partnerships
In recent years, funding difficulty has been the major hindrance to landing PPP programs. Insurance funds are a high-quality funding resources and are highly compatible with the features of PPP programs. However, few insurance funds have participated in PPP projects, and among the existing ones problems such as immature models and low reproducibility abound. This report aims at offering a practical solution to these problems.

With a summary of foreign experiences in PPP programs, the report suggests that China should follow the unified top-level design on the basis of adhering to the basic principles, and develop a reproducible plan of insurance funds to promote PPP development according to the current situation of each insurance company.

Written by: Xu Yuanrui
Edited by: Wang Xi
Source: PKU News (Chinese)