Speech at the First Meeting of the Public-Private Partnership andInfrastructure Financing Network of Asia and the Pacific
Jiao Xiaoping, Director General, China PPP Center
DistinguishedDelegates, Ladies and Gentlemen,
Goodmorning! It’s my great pleasure to attend the First Meeting of the Public-Private Partnership and InfrastructureFinancing Network of Asia and the Pacific. On behalf of China PPP Center ofMinistry of Finance, I would like to extend warm welcome to all of you who havecome a long way to China for the great meeting in Guiyang. I would like to takethis opportunity to share with you my three points:
First, establishing PPP and InfrastructureFinancing Network will accelerate the infrastructure development in Asia-Pacific.
Insufficientinfrastructure investment has been a major obstacle for most developingcountries in the region to achieve sustainable development. Statistics show that,in order to effectively support the UN 2030 SDGs Agenda, total investment of 26trillion US dollars should be placed in the infrastructure sector by 2030 inAsia-Pacific, accounting for 6% of region’s average annual GDP. If taken thecost of climate-friendly infrastructure into consideration, the rate would be 2%higher.
Byholding this meeting, UNESCAP provides us an opportunity to enhancecommunication, deepen consensus, strengthen cooperation and improveinfrastructure development. In April 2017, at the 4th High-Level Dialogue on Financing for Development in Asiaand the Pacific in Bangkok,Thailand, China PPP Center proposed that UNESCAP should take the leading rolein establishing a regional PPP network, which could help promote theapplication of PPP model and accelerate the region’s infrastructuredevelopment. After just one year, the 74thSession of UNESCAP hasauthorized the UNESCAP secretariat to develop the PPP and Infrastructure Financing Network of Asia and the Pacific. Here I’d like to express my heartfelt thanks to Mr. Hamza Malik and histeam. Without their great efforts, there wouldn’t be our today’s gathering.
Wehope the network could play an important role in three aspects: First, enhance regional PPP knowledgeand experience exchanges. Through the network, countries in the region couldmake better use of PPP model as an innovative tool to combine government andmarket resource for boosting local development. Second,establish an information platform and database for PPPprojects in Asia-Pacific for all interested parties, attracting private investorsand maximizing financing. Third, enhancepolicy coordination to build an open regional PPP market, promoting investment,industrial cooperation and common development within the region.
Second, PPP is an importantinstrument to achieve the United Nations 2030 Sustainable Development Goals.
TheAsia-Pacific has become the most vigorous region in the world with huge economicpotential, and the most important driver of global growth. Yet, we must recognizethere’s a gap in investment, which has become critical constraining factors forthe region’s sustainable growth.
Publicsector funding alone cannot meet the gap. In the traditional government-supplymodel, infrastructure projects commonly put more emphasis on construction overoperation and investment over performance, resulting in high investment cost,low operational efficiency and heavy fiscal burden.
PPPmodel, as a market-oriented and efficient supply model of public goods, notonly addresses the problem of supply shortage, but also improves quality.
Third, we jointly build the grandPPP market in Asia-Pacific through win-win cooperation.
In2013, China kicked-off a new round of reform, a unified PPP market has been expandingremarkably. As of July 2018, there are 7,867 PPP projects listed in China’s National PPP Integrated InformationPlatform with total planned investment of 11.8 trillion RMB, covering 19industry sectors. Among them, 3,812 projects with total investment of 6.1trillion RMB have reached the financial close, with a rate of 48.5%. The ProcuringInfrastructure PPPs2018 Report published by theWorld Bank shows, among the 135 economies, China’s institutional framework and practiceof PPP ranks upper-middle globally interms of Project Preparation, Project Procurement, PPP Contract Managementand Unsolicited Proposals.
China’s PPP practices proved that PPP model is aninnovative development model for developing countries in institutiontransformation. The PPP development in Guizhou province is a vivid example. Guizhouused to be an underdeveloped province in China with huge shortage ofinfrastructure. Through PPP model, Guizhou has realized that every county hasaccess to expressway. Tourism, water conservancy, agriculture, city development,education sectors etc. have made rapid progress as well. PPP model played a bigrole for Guizhou’s growth, poverty reduction and improvement of people’s livelihood.As ofJuly 2018, 185 projects with total investmentof 535.6 billion RMB have reached the financial close.
China, as a developing country, is in the similardevelopment stage as most countries in the region, and also willing to shareits PPP experiences. China’s PPP market is open to international investors,especially to the Asia-Pacific countries. We also encourage Chinese enterprisesto invest in Asia-Pacific region through PPP model.
The Belt and Road Initiative, as a global commondevelopment model to build a community of shared future for mankind, was putforward in 2013. Chinese enterprises have invested over 60 billion US dollarsin BRI countries, creating about 200 thousand jobs, and most infrastructureprojects are delivered with PPP model. Many member states of UNESCAP are alsocountries alongside the Belt and Road, and we will support Chinese enterprises touse PPP model to invest in those countries.
Ladiesand gentlemen, dear friends! Once again, I’d like to extend my warmest welcome toall of you here. In the next two days, I hope we’ll make fruitful andimpressive achievements, and set up a friendship network. Lastly, I wish the meetinga complete success! Wish you a joyful stay in Guiyang!