The Growth and Spatial Variation of China’s Public-Private Partnerships (PPPs): Localization and Fiscal Manipulation under Soft Budget Constraints
Ms WU Mengdi PhD Student, Department of Geography, HKU
China has experienced an explosive growth of infrastructure Public-Private Partnership (hereafter PPP) in recent years. While PPPs have been enthusiastically promoted by China’s local governments, available evidence suggests that many of these PPPs have not performed well economically, socially and environmentally. Existing research of China’s PPPs has been dominated by concerns over managerial issues, such as contract management, risk management, performance management, economic and financial viability. Little is understood about the pattern and processes of the growth and spatial variation of China’s PPPs, their underpinning mechanism of success and failure, and their uneven social, economic and political effects.
Internationally, current studies of the PPPs are led by two competing interpretations. The public management interpretation provides insights into the managerial benefits of public-private partnership in solving public service provision and other complex societal problems whereas the political economy perspective focuses on the restructuring of state-market relations through public-private partnership for delaying the endogenous capitalist crises of capital over-accumulation. However, the public management interpretation suffers from its problem of ignoring the imperatives of political power and the social/geographical conditions in which political power is embedded. The political economy perspective gives privileges to the imperatives of global capitalism and places domestic and local socio-political conditions in a residual position. To better understand the growth and spatial variation of China’s PPP, this research draws upon political economy theories and establishes a conceptual framework taking into account the social, political and institutional contexts in China. Particularly, the framework considers vertical and horizontal dynamics of state power and the existence of soft budget constraint, and incorporate this consideration into the existing political and fiscal explanation for China’s urban transformation. Research objectives are to explore the pattern and processes of the growth and spatial variation of China’s PPPs, their socio-political origins, and their uneven effects economically, socially and politically. Both quantitative and qualitative analyses will be conducted, including a cross-sectional analysis at the national prefectural-city level and a longitudinal analysis with two case studies in Guangzhou and Wuhan. Both theoretical and practical contributions are expected to be made by unfolding China’s PPP-led urban transformation and its emerging uneven geography.