Foreign Investment and Public-Private Partnerships in China

Abstract

Foreign capital entered China’s infrastructure market in the 1980s, and by the 1990s, China already had a large amount of foreign investment public-private partnerships (PPP) programmes. However, although the government has generalised the PPP in the infrastructure market in recent years, the number of foreign investment PPP programmes have declines. The reasons behind this decline are multidimensional and complex. Nonetheless, thanks to the development of legislation and market, in future the Chinese PPP market should have great potential. This paper intends to find the reasons for the decline of foreign investment in PPP, and to discover China’s large potential PPP markets for the foreign investors in the following five years. The author analyses Chinese foreign investment through PPP from three dimensions: historical development, legal framework and legal procedures. The analysis of the historical development gives the timeline highlighting the rise and fall of the foreign investment through PPP in China, while the analysis of the legal framework and legal procedures explains the development of relevant legislation and reveals some legislative problems. Finally, the author concludes with some reasonable explanations for the decline, and discusses the potential investment demand of China’s PPP market. Keywords: Foreign Investment; Public-Private Partnerships; China; Legal Certainty.