Economics
In China, Public-Private Partnerships Are Really Public-Public
- Government is promoting PPPs to boost infrastructure funding
- Most project partners turn out to be state-owned companies
This article is for subscribers only.
China’s effort to promote public-private partnerships to fund roads, bridges and railways and keep a lid on rampant debt growth is succeeding in luring companies to the projects. Problem is, they’re mainly state-owned.
Two years into the PPP push, the majority of partners in the projects have turned out to be state-owned enterprises, according to analysts at Fitch Ratings Ltd., Bank of America Corp. and Oxford Economics Ltd. The upshot: while debt pressure will be relieved for local governments, it’ll just end up on the books of another arm of the state.