China: Public-Private Partnerships – January 2014
British Embassy Beijing
Technical workshops in Beijing and Shanghai illustrate growing central and local government interest in the UK’s experience of public-private partnerships, providing a strong platform for UK companies to engage with policymakers..
China continues to urbanise; Chinese people’s expectations about public services are increasing; Chinese public debt is expending too quickly. Three well known statements that present Chinese policymakers with a conundrum: how to finance and design future urbanisation? Part of the answer may come from public private partnerships (PPP), regarded by Chinese policy-makers as an important illustration of UK policy innovation.
The UK’s experience is certainly attracting growing interest, as illustrated last week in four days of workshops in Beijing and Shanghai, organised by the British Embassy and the China Britain Business Council.
Over 100 officials attended the two-day training events, including an unprecedented number of Director General level (i.e. very senior) officials from both central and local government. The attendees heard from over 20 speakers, including from British companies like Hogan-Lovells, Gleeds, PWC, HSBC and Pinsent Masons. This provided a rare platform for UK companies to engage directly with the authorities.
These workshops form part of our strategy to support PPP reform in China, sitting alongside targeted project work with the central authorities and sending delegations of officials to receive training from Infrastructure UK (IUK).
PPP can play an important role in China by reducing the cost, increasing the innovativeness and smoothing public expenditure on public services delivery. This benefits global growth. If China develops PPP in a manner that is consistent with the UK’s own experience, then British companies will not just have a chance to showcase their expertise through our project activities, but will also gain a competitive edge in winning bids.
There are legal, administrative and philosophical barriers to the widespread adoption of PPP in China. However, the political and economic rationale for addressing these barriers is strong, as shown recently in the Third Plenum, the Central Urbanisation and Work Conference and the nationwide debt audit.
The NDRC’s urbanisation plan reportedly contains references to the applicability of PPP. The Ministry of Finance are studying the mechanics around establishing a central PPP unit in central government. The Embassy and IUK have been working intensively with both over the past 12 months.
There is already a busy schedule of activities for 2014/15. This includes more SPF projects, further training at IUK for specific groups of officials, and additional technical workshops in 2nd tier Chinese cities. Crucially, we look forward to welcoming IUK back to China: their knowledge of PPP in the UK and other markets is valued greatly here.
The purpose of the FCO Country Update(s) for Business (”the Report”) prepared by UK Trade & Investment (UKTI) is to provide information and related comment to help recipients form their own judgments about making business decisions as to whether to invest or operate in a particular country. The Report’s contents were believed (at the time that the Report was prepared) to be reliable, but no representations or warranties, express or implied, are made or given by UKTI or its parent Departments (the Foreign and Commonwealth Office (FCO) and the Department for Business, Innovation and Skills (BIS)) as to the accuracy of the Report, its completeness or its suitability for any purpose. In particular, none of the Report’s contents should be construed as advice or solicitation to purchase or sell securities, commodities or any other form of financial instrument. No liability is accepted by UKTI, the FCO or BIS for any loss or damage (whether consequential or otherwise) which may arise out of or in connection with the Report.