Research On The Development And Government Control Of PFI Industry In China

PFI (Private Finance Initiative) is an effective manner of the non-government supply for public projects, which has been promoted positively, and achieved good economic and social benefits in the United Kingdom, Japan and other developed countries and regions. China has huge demand for public projects (especially in the middle and western regions), and the financial funds are in shortage while a large number of private funds are in idle, so it is not only quite necessary, but also entirely possible to develop PFI industry. In fact, PFI projects are also more and more year by year, but the problem is that we still haven' t clear development plans and institutional arrangements, making the development of this industry with definite blindness, and lack of standardization. In this paper, learning from the experience of developed countries, and in light of China's basic national conditions, we study on the PFI theory, discuss China's PFI developing model and the management system, and then we achieve the following results:1) Based on the economic analysis of PFI industry development, we define two economies results-the reducing cost and early supply-generated by developing public projects in PFI mode; the conclusion is also obtained that when private investment return expectations lower than overall cost effectiveness, government and private investors will both have an excess receipts in the government subsidy section (V₀ - V₁ + R, V₂ - v₁) or in the concession agreement prices section(V'₁ -V'₂, V'₁'-V'₀ -R), so as to provide an important theoretical basis for the development and the operation of China PFI industry, and the government's macroeconomic policy;2) The three-dimensional development mode and construction programs of China's PFI industry is put forward based on the theory of spatial structure of economic construction. In the application field, we have established a system of public projects PFI evaluation index and evaluation model, and bring about the field alternative route that China PFI industry development should take public projects with a higher PFI index and more private investment as the core area, and preference gradually turn to the application area expanding from public projects with a lower PFI index and a lower private investment preference; in the location field, we bring about the location alternative route taking Beijing, Shanghai and Guangzhou as the core cities, and building three high-developing-speed regions of FPI industry around the core cities of Beijing and Tianjin, the Yangtze River Delta and Pearl River Delta region, and then expanding to other provincial cities and even the whole country through these three development regions; in the mode of operation, setting up the operation mode alternative route taking the BTO mode as the core, expanding to the BOT, BOO mode with the gradual development of the PFI industry;3) Through questionnaire, cluster analysis and quantitative indicators, we studied the factors affecting the development of China PFI industry, and proposed a management system of Chinese PFI industry, consisted of four basic forms: the constitution system, the operational flow, legislations and regulations, and a learning mechanism. The study results show: shared risk, strengthening public functions and the technological edge are positive factors in promoting the development of China PFI industry, the lack of a protection mechanism, operational flow deficiencies and the lack of relevant knowledge are negative factors to obstruct China's PFI industry development. So the government should implement the linear or matrix mode control to PFI industry, define the project type based on the NPV and VFM, promulgate the basic law of PFI industry and the revision of relevant laws, establish PFI utility association, train professionals, strengthen the establishing work for scientific studies, and build a good system platform for learning and knowledge accumulation.In addition, the paper also taking the construction industry as an example, studies the role of PFI industry development in promoting the industry economics, and finds a correlation between PFI industry development and the development of the construction industry. PFI projects have a higher investment growth rate and a lower market share rate, at the "operational" stage in the Boston Matrix; along with its high-growth trend, it will be the main contributor to economic growth in the construction industry. In a short period, the level of PFI industry development is with correlation of the level of development of the construction industry, but in the long run, the construction investment growth rate is the Granger cause of the PFI investment growth rate, and they share Co integration relations.The results of this paper on studying the PFI basic theories are expansions of the original PFI theory for a further step, so as to promote the formation and development of its independent subject; the proposed three-dimensional development mode and its management structure of PFI industry, can provide theoretical guidance and support for Chinese government to formulate PFI industry development plans and build a good system platform.