The public-private partnership (PPP) model has been promoted as a good way to ease financing difficulties for local governments and has been keenly promoted by the authorities. The PPP model is mainly used for public service projects, especially in rail transportation, public facilities, environmental protection, clean energy and healthcare for the elderly.

The PPP model has been successful in Britain and Australia, and has become widely used in these countries. Developing countries are also trying to promote the PPP model.

Chinese authorities hope to attract more private capital and foreign capital to participate in PPP projects, which could help ease the pressure on local governments' finances.

The PPP model could also give foreign investors greater access to the domestic market. China's growth was supported in the past by large amounts of government investment. But now the country's growth model is changing, with the focus shifting to supporting advanced technology and innovation, so attracting foreign capital to PPP projects is set to become more important.

Recently, the local authorities in Beijing unveiled a pilot program to attract foreign capital into new emerging industries such as software and information services. The program also encouraged foreign companies to build research centers in Beijing.

Based on an article from China Securities Journal.

China Securities Journal