Financing China’s unprecedented infrastructure boom: the evolution of capital structure from 1978 to 2015 |
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| Authors: | Jerry Zhirong Zhao Guocan Su Dan Li |
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| Institution: | 1. Hubert H. Humphrey School of Public Affairs, University of Minnesota, Minneapolis, USA, China Institute for Urban Governance, Shanghai Jiaotong University, China;2. School of Economics, Xiamen University, Xiamen, China;3. School of Public Administration, South China University of Technology, Guangzhou, China |
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| Abstract: | ABSTRACTThe authors examine the sources of the funds that have financed China’s infrastructure development since 1978. They define the five periods in which this development has taken place in terms of predominant financing: fiscal funds, build-operate-transfer (BOT), treasury bonds, the land financing, and local bonds. The system is characterized by a heavy reliance on debt financing and one-off revenues. These approaches have raised widespread concerns about fiscal sustainability in China. The authors explain why a shift towards the more conventional approach of fiscal funds is necessary. |
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| Keywords: | Capital structure debt financing infrastructure finance public budgeting public–private partnership (PPP) |
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