China’s public-private partnership (PPP) construction market has entered the "fast lane" with more the $2 trillion worth of projects now under way, a government research office said.
The approach to project funding, in which private companies fund public infrastructure such as bridges, highways and metros and recoup their money through tolls and fares, is set to become a unified, standardised, transparent market, the government agency said.
As of the end of June there were 13,554 PPP projects nationwide with investment of 16.3 trillion yuan ($2.4 trillion), according to data from the China Public Private Partnerships Center, China’s Xinhua news agency said on 30 July, Reuters reports.
"Our country’s public-private partnership project construction has [entered] the fast lane, an active period," said Wang Yiming, deputy director of the State Council Development Research Center.
Data showed that 34% of projects had reached the implementation phase.
However, Wang warned of risks including excessive financing, high local government debt and impractical projects in rural areas.
In recent years, China’s central government has tightened controls on local government debt.
Authorities have also vowed to prevent local governments from using public-private partnerships, government investment funds and government procurement services as "disguised channels" for raising debt, Reuters reported.
In recent years China has promoted PPPs as a way of clamping down on ballooning public sector debt.
But in February this year analysts told Bloomberg that most of the "private" partners in China’s PPPs are actually state-owned enterprises.
Image: Nanjing Metro Line 1 approaching Hongshan Zoo station. PPPs are used to procure public infrastructure such as bridges, highways and metros (Luoxingyang000/Creative Commons)