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By Meng Chun, DRC

2017-1-6

In view of the One Belt and One Road Initiative, infrastructure has a strong public service attribute and is in accordance with the investment projects of public-private-partnership model (PPP). Viewing from the PPP model, the partnership is established between the government and the social capital for infrastructure construction and public services as well as for win-win results.

First, PPP model is a market-based and an innovative and socialized public service supply management model, and its major character is for fair competition, equal cooperation, risk sharing, and benefit sharing. Through bringing into play the decisive role of the market in resource allocation and the government function, people can increase the supply of public goods and public services, improve the efficiency of the use of public resources, and realize that everything is in its place.

Second, the cooperation of related countries in infrastructure investment and construction is becoming closer. From January to November 2016, the non-financial direct investment made by China's enterprises to 53 countries related to the One Belt and One Road Initiative reached $13.35 billion, accounting for 8.3% of the total amount in the same period; the number of new overseas contracted projects stood at 7367, and the new contract amount reached $100.36 billion, an increase of 40.1% year on year, accounting for 52.1% of the contract amount of China's new overseas contracted projects.

Third, during the infrastructure construction of the One Belt and One Road Initiative, there remain some problems, such as the huge fiscal pressure on related countries and limited participation of social capital, but PPP model as a major innovation in public service supply mechanism has broad prospects. In applying PPP model to respond to the One Belt and One Road Initiative, we need to highlight its strategic significance, analyze the local conditions, bring into play the existing bilateral and multilateral cooperation mechanism, and pay attention to innovation-driven development.

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