Regulating Local Government Financing Vehicles and Public-Private Partnerships in China


Book Description

In this paper, we argue that there is much room for China to strengthen its regulatory framework for public-private partnerships (PPPs). We show that infrastructure projects carried out through local government financing vehicles (LGFVs) were largely unregulated PPPs, and significant fiscal risks have already manifested themselves. While PPPs can potentially provide efficiency gains, they can also be used by governments to circumvent budgetary borrowing constraints. Therefore, effective PPP regulation is key to delivering PPPs’ benefits while containing their potential fiscal risks. The authorities have taken concrete steps in order to establish a sound regulatory framework and foster a new generation of PPPs. However, to make the framework effective, we highlight a few issues to be resolved. Based on international best practice, we propose a four-pillar regulatory framework for China, which could be implemented gradually in three stages.




Financing Cities


Book Description

This book highlights the need to boost infrastructure investment in cities as also the necessity for fiscal management across all levels of government-within the context of decentralizing service delivery responsibilities. The volume provides case studies reflecting various viewpoints and a range of success and failure stories from five countries. The topics covered include: - Impact of political and fiscal decentralization - Limitations on borrowing - Managing moral hazard - The role of the financial sector in striking a balance between controls and encouraging the local government to maintain fiscal discipline







Legal Aspects of Privately Financed Infrastructure Projects (PFIPs) in China


Book Description

This book discusses the reform and improvement of Chinese legislation on Privately Financed Infrastructure Projects (PFIPs), the goal being to help its implementation in China satisfy international standards. In this regard, current Chinese laws are found to be insufficient when it comes to reducing risks to PFIPs, due to certain shortcomings. Therefore, the corresponding legislation must be reformed and improved.The Legislative Guide and Model Provisions drafted by UNCITRAL are discussed as the international standards that can effectively guide this reform; other countries’ laws on PFIPs provide supplementary reference material.Given the rapid rise in the use of PFIPs in China, this book offers a strong theoretical basis for improving Chinese legislation. It also provides general suggestions that can be applied to the reform of laws on PFIPs in any country.




Annual Report on The Development of PPP in China


Book Description

This book gathers invited top experts on Public-Private partnership (PPP) in China, from both theoretical and practical fields, to present the most comprehensive analyses of PPP’s practice in China up to 2017. This timely book offers researchers and practitioners a thorough understanding of the PPP’s development in China, including its definition, its modes, its features as well as its many kinds of applications into different industries including medical care, environmental protection, education, public works, park development, etc. It addresses diverse themes in PPP analyses such as quantitative analyses and qualitative analyses; data statistics and case study, theoretical framework modeling and field study verification. The book is an overview of the Chinese PPP development through 2017.




Urban China


Book Description

In the last 30 years, China’s record economic growth lifted half a billion people out of poverty, with rapid urbanization providing abundant labor, cheap land, and good infrastructure. While China has avoided some of the common ills of urbanization, strains are showing as inefficient land development leads to urban sprawl and ghost towns, pollution threatens people’s health, and farmland and water resources are becoming scarce. With China’s urban population projected to rise to about one billion – or close to 70 percent of the country’s population – by 2030, China’s leaders are seeking a more coordinated urbanization process. Urban China is a joint research report by a team from the World Bank and the Development Research Center of China’s State Council which was established to address the challenges and opportunities of urbanization in China and to help China forge a new model of urbanization. The report takes as its point of departure the conviction that China's urbanization can become more efficient, inclusive, and sustainable. However, it stresses that achieving this vision will require strong support from both government and the markets for policy reforms in a number of area. The report proposes six main areas for reform: first, amending land management institutions to foster more efficient land use, denser cities, modernized agriculture, and more equitable wealth distribution; second, adjusting the hukou household registration system to increase labor mobility and provide urban migrant workers equal access to a common standard of public services; third, placing urban finances on a more sustainable footing while fostering financial discipline among local governments; fourth, improving urban planning to enhance connectivity and encourage scale and agglomeration economies; fifth, reducing environmental pressures through more efficient resource management; and sixth, improving governance at the local level.




Unlocking Land Values to Finance Urban Infrastructure


Book Description

Land-based financing of urban infrastructure is growing in importance in the developing world. Why is it so difficult to finance urban infrastructure investment, when land values typically increase by more than the cost of investment? Unlocking Land Values to Finance Urban Infrastructure examines the theory underlying different instruments of land-based finance, such as betterment levies, developer exactions, impact fees, and the exchange of publicly owned land assets for infrastructure. It provides a wealth of case-study illustrations of how different land-based financing tools have been implemented, and the lessons learned from these experiences. This practical guide is designed to help expand the role of land-based financing in urban capital budgets in a way that strengthens urban infrastructure finance and urban land markets.




The Fiscal Framework and Urban Infrastructure Finance in China


Book Description

China has experienced more than 25 years of extraordinary economic growth. Underlying this growth has been a decentralized fiscal system, in which provinces and large cities are given the freedom to make infrastructure investments to stimulate local development, and are allowed to retain a large part of the fiscal revenues that are generated from economic activity. Although successful as a growth strategy, this policy created two problems for national fiscal management. First, it significantly reduced the central government's share of fiscal revenues, which fell from 34.8 percent in 1980 to 22 percent in 1992. Second, it widened economic and fiscal disparities between the rapidly growing urban coastal region and the rest of the country. Rapid growth in subnational debt (which rose 23-fold in a decade) and subnational nonperforming loans (estimated by the authors to range between US$100 billion and US$150 billion) has placed pressure on China's financial system. Traditionally, China has favored bank lending as a source of finance because the banking system has provided a vehicle for central political control over local debt. But as China's financial system matures, creditworthiness standards must become more important. The authors recommend greater use of the revenue streams from infrastructure assets as a financing source, and gradual relaxation of central political control over subnational debt. One step in this direction would permit leading cities to issue municipal bonds based on objective financial standards.




Financing China’s Belt and Road Initiative


Book Description

Centering on the investment and financing infrastructure of China’s Belt and Road Initiative (BRI), this book puts forth the basic principles and general objectives of constructing a new investment and financing system of this magnitude. Beginning with a succinct analysis of the practical issues faced while developing the BRI’s investment and financing system, the author puts forward several approaches to optimizing and reestablishing the system for the further advancement of investment and financing among and beyond the Belt and Road countries. Topics include credit rules, management and control systems, investment protection, dispute settlement and risk assessment while establishing a new mechanism that helps resolve debt defaults, checks for potential corruption and bribery, fosters new growth, and enhances information transparency. The book will be a practical reference for researchers interested in the Belt and Road Initiative and world investment and finance, as well as policymakers, financial institutions and enterprises relevant to the BRI.