State capital mobilization under soft budget constraints: Uneven growth and spatiality of China's public-private partnerships

Abstract

This study examines the uneven growth and spatiality of the practicing of public-private partnerships (PPPs) in China where capital mobilization had until recently been monopolized by the Party-State. Two types of PPPs are identified, namely those formed for businesses and economic developments and others for the purposes of social welfare and environmental protection. PPPs are not prominent in the cities and regions with a mature market and advanced economy. Instead, they are strongly associated with some backward and remote areas where the degree of marketization is low and the legacy of state socialism remains high. Results of multi-variate modeling suggest that the spatial variation of China's PPPs is significantly correlated with neither the degree of marketization nor the level of fiscal pressure but instead the socialist legacy of soft budget constraints. The findings of this research foreground an interesting practice that blends the state-market binary and challenge the popular perception of the state and market as unambiguous theoretical coordinates.