Implementation of Private Infrastructure Development Methods in China

Abstract

For this introductory paper on the implementation of private infrastructure development methods in the People's Republic of China, the author defines three time periods:“The Beginning”-from 1987 to 1995:“The Present”-from 1995 to 1998 and “The Future”-from July 1998 onwards.“The Beginning” is characterized by arelatively small number of projects centered in the economically advanced province of Guangdong. The the field of participants is led by a small number of pioneering Hong Kong property developers.“The Present” period, from 1995 to July 1998. features a rapidly growing number of participants in the industry, with international utilities, engineering firms, and investment funds adding to the Hong Kong developers. The geographical scope of private infrastructure development in China also expands to include all of the coastal provinces. Finally, the style of project structure as well as the legal and regulatory framework for private participation in infrastructure begins to expand during thisperiod, with government bodies as well as private developers experimenting with new project structures and legislation.Finally, “The Future” looks at the direction of private participation in the development of infrastructure in China, and is based on current trends, including: increasing sophistication, growing competition and rising costs in the coastal regions; shift of central government emphasis to inland investment; establishment of new laws governing private infrastructure participation; and rapidly changing conditions in both international and domestic financial markets.