PPP (Government and Social Capital Cooperation: Public-Private Partnership)


The PPP (Public-Private Partnership), also known as the PPP model, is the cooperation between the government and social capital. It is a project operation mode in public infrastructure. Under this model private enterprises, private capital and the government are encouraged to cooperate and participate in the construction of public infrastructure.

According to this broad concept, PPP refers to the process of cooperation between the government's public sector and the private sector, and allows non-public, sector-owned resources to participate in the provision of public goods and services, so that the parties to the cooperation achieve more favorable results than expected. Compared with BOT , the narrow feature of PPP is that the government participates in the management and operation process of the later stage of the project. Both the government and the enterprise participate in the entire process. The two parties cooperate for a longer period of time and their information is more symmetrical. PPP is the English acronym of Public-Private Partnership. It means that in the public service field, the government chooses a competitive way to choose social capital with investment and operational management capabilities. The two parties conclude contracts in accordance with the principle of equal consultation, and social capital provides public services. The government According to the results of public service performance evaluation, the company paid the consideration to social capital. PPP provides services in the form of market competition, mainly in public and quasi-public areas. PPP is not only a means of financing, but also a reform of the institutional mechanism involving administrative system reform, financial system reform, ans investment and financing system reform. On November 27, 2017, the Asian Development Bank released the first monitoring report on member governments and social capital cooperation "PPP monitoring."


Pattern Meaning:

Why are PPP related policies intensively introduced and what is the significance of the PPP model?

The government and social capital cooperation model is a long-term cooperative relationship established in the field of infrastructure and public services. The usual model is that social capital undertakes most of the work of designing, constructing, operating, and maintaining infrastructure, and obtains a reasonable return on investment through “user pays” and necessary “government payments”; government departments are responsible for the price of infrastructure and public services and Quality supervision to ensure maximum public interest. At present, China is implementing a new strategy for the development of urbanization. Urbanization is the requirement of modernization, and it is also an important starting point for stabilizing growth, promoting reform, adjusting the structure, and benefiting people's livelihood. Basing on domestic practice, drawing on international successful experience, and promoting the use of government and social capital cooperation models are major tasks of economic reform identified by the country. This is of great significance for accelerating the construction of new urbanization, enhancing the ability of state governance, and building a modern financial system.

(1) Promoting the use of government and social capital cooperation models is an inevitable requirement for promoting economic transformation and upgrading and supporting new urbanization construction. The government can open up infrastructure and public service projects to social capital through the government and social capital cooperation model, which can broaden financing channels for urbanization and form a diversified and sustainable capital input mechanism, which is conducive to integrating social resources, activating social stock capital, and inspiring the vitality of private investment will expand the space for enterprise development, enhance the power of economic growth, and promote economic restructuring and transformation and upgrading.

(2) Promoting the use of government and social capital cooperation models is an institutional mechanism that accelerates the transformation of government functions and enhances the ability of state governance. The standardized government and social capital cooperation model can combine the government's development planning, market supervision, public service functions with the management efficiency of social capital, and the power of technological innovation to reduce excessive government involvement in microeconomic affairs and improve the efficiency of public services. quality. The government and social capital cooperation model requires equal participation, openness and transparency. The government and social capital work in accordance with the contract, which is conducive to the decentralization of the government, better the transformation of government functions, promotes the contract culture, and reflects the concept of modern state governance.

(3) Promoting the use of government and social capital cooperation models is an important part of deepening reform of the fiscal and taxation system and building a modern financial system. According to the fiscal and taxation system reform requirements, one of the important contents of the modern financial system is to establish a multi-year budget balance mechanism, implement medium-term financial planning and management, and compile comprehensive financial reports that fully reflect the state's assets and liabilities. The essence of the government and social capital cooperation model is that the government purchases services. It requires the management of budgetary revenues and expenditures from the previous single year, and gradually shifts to strengthening medium and long-term financial planning. This is highly consistent with the direction and goals of deepening the fiscal and taxation system reform. Promoting the use of the "PPP" model is an important means to support the new type of urbanization. It is conducive to attracting social capital, broadening urbanization financing channels, and forming a diversified and sustainable capital input mechanism.