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Beijing Offers PPP Funds for Local Government to Spur Investment, Stabilize Growth

| Sep 07, 2015 06:45 AM EDT

Chinese builders carry out construction in Shanghai as part of the infrastructure projects of the government.

The Chinese government, through the Ministry of Finance, has presented public private partnership (PPP) funds worth 100 billion yuan ($15.7 billion) for local governments, in a bid to attract investment and boost the economic growth of the country, the Want China Times reported.

According to the report, the government is also set to raise the level of its PPP projects for public construction in the next six months.

In addition to the multi-billion yuan PPP funds for investment loans, the government also plans to allot 1.2 billion yuan ($189 million) to enable local governments to conduct research on PPP projects, as the funds have already been transmitted to the Ministry of Finance's PPP center.

The ministry is also set to provide a financial subsidy for local governments planning to turn local debts into PPP projects.

The report said that the PPP funds set up by the ministry will play the leading role in attracting social capital into PPP projects, although social capital providers are reluctant to join PPP projects.

However, through the leadership of the ministry, several local governments have started to sett up localized PPP funds, with the provincial government of Shandong putting up projects worth 80 billion yuan ($12.6 billion) for local development.

Dayue Consulting general manager Jin Yongxiang said that PPP funds were set up mainly to address the lack of capital, in contrast with social capital which has likely to have higher loan rates.

Jin said that the 100 billion yuan ($15.7 billion) funds would have a critical role in stabilizing economic growth.

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