PPP has great potential in Belt and Road cooperation

2017-09-28
Xinhua

BEIJING — China should tap the huge potential of public-private partnerships (PPPs) when investing in countries participating in the Belt and Road Initiative, officials said on Sept 28.

“With the development of the Belt and Road, the world is facing a new boom in infrastructure investment, which will provide ample opportunities for PPP development,” Li Pumin, secretary-general of the National Development and Reform Commission (NDRC), said at a PPP forum.

PPPs can help attract private capital, technology and professionals to infrastructure projects in Belt and Road countries that were once dominated by the government, according to Jia Biao, an official with China Insurance Regulatory Commission.

Innovative financing models are necessary since some projects under the Belt and Road Initiative require large investments with long payback periods.

PPPs have existed in China since the 1980s, but the adoption of the financing mode had been slow until China released two PPP guidelines in 2014.

In China, operators of PPP projects are encouraged to directly solicit money from the capital market, and social security funds and insurance premiums are allowed to invest in these projects.

The Belt and Road Initiative, an infrastructure and trade network connecting Asia with Europe and Africa along ancient trade routes, was put forward by China in 2013.