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Opportunities and Challenges for Foreign Undertakings in China’s PPPs Market

Tongle Si

DOI https://doi.org/10.21552/epppl/2022/1/7

Keywords: public-private partnerships, PPPs, foreign direct investment, FDI, sustainable development, China


Public-private partnerships (PPPs) refer to arrangements between the public sector and the private sector, in which they share rewards, responsibilities and risks. PPPs are mainly used to deliver infrastructure and public services. In the recent decade, China has witnessed rapid growth in both the number and investment scale of PPPs projects. With the promotion of sustainable development in the 13th Five-Year Plan, the Chinese government starts to take sustainability into considerations when carrying out PPPs projects. Different from traditional command-and-control measures that impose explicit policy orders on private sectors, PPPs function as a market-based instrument (MBI) that gives private sectors a nudge stimulating their innovation in the market competition. In China's PPPs market, the proportion of foreign investment has been declining in recent years. The 14th Five-Year Plan released in early 2021 emphasises the importance of involving foreign investors to realise sustainable development goals in the coming five years. The Chinese government has released supplementary rules to strengthen the confidence of foreign investors in Chinese PPPs projects. This article sorts out current regulations that directly affect foreign companies’ participation in China’s PPPs projects, further exploring both opportunities and challenges for foreign companies to compete in China’s PPPs market.
Keywords: public-private partnerships, PPPs, foreign direct investment, FDI, sustainable development, China

Tongle Si, PhD candidate, Department of International and European Law, Maastricht University. For correspondence: <mailto:tongle.si@maastrichtuniversity.nl>

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