Research On Risk Of PPP Project Securitization In China

In recent years,in order to speed up infrastructure construction,the state and local governments have actively promoted the development of the PPP(Public-Private Partnership)model.However,PPP projects often have the characteristics of long investment cycle,huge investment amount and low returns,they are less attractive to social capital.Although the liquidity of the PPP project is poor,its major characteristic is that it has a relatively stable future cash flow.ABS(Asset-backed securitization)can be used to issue asset-backed securities by using the stable future cash flow of the PPP project as a basic asset to improve the liquidity of assets,activate the existing assets and provide an effective channel for the withdrawal of social capital funds.The article first introduces the related research of PPP model and ABS.On this basis,the basic principles of PPP project securitization are described.Then it analyzes the market operation of PPP project securitization.It mainly analyzes the current development status in terms of the overall development of PPP projects and the overview of PPP project securitization.Followed by a detailed introduction of the default case "Dacheng West Yellow River Bridge ABS",the specific reason for the breach of this case was the downturn in the coal market caused by the macroeconomic and supply-side decapacity policies resulting in cash flow less than expected.Combined with the characteristics of currently issued products of PPP project securitization,potential problems and risks were analyzed,and specific proposals for case default treatment were put forward.The final conclusion is:The potential problems and risks of PPP project securitization include the risk of cash flow shortage of basic assets,the risk of securitization product design,the risk of participants,the lack of default treatment mechanisms,and institutional risk,and propose targeted recommendations to promote the development of PPP project securitization.