The Government Guides Banks To Participate In Research On Yunnan PPP Projects

Public product supply is an important function of modern government.As one of the multi-supply modes of public goods,compared with other public goods supply mode,there are obvious advantages in PPP project.It can improve government efficiency,reduce government debt,and improve project management level,which has rich theoretical foundation and strong research value.As an important subject of China’s financial system,banks have the function of accumulating and distributing capitals,which is an important financing platform for PPP projects.However,due to the low income and long cycle of PPP projects,banks lack the enthusiasm to participate.At present,China’s banking institutions mainly include three types:central banks,policy banks and commercial banks.Except for the central bank,although the objectives of other types of banks participating in the construction of PPP projects are different,if the participation environment of PPP projects can be further optimized,the implementation process can be further standardized,and banks can also increase their enthusiasm for participation.Under the current economic system and financial system in China,only by guidance of the government can push banks participate in the PPP project,so that encourage PPP projects’ promotion and development,and ultimately meet the needs of the people.In 2018.Yunnan government debt ranked eighth in China.The main reason why economic and social development of Yunnan falls behind other provinces is the short board in infrastructure construction.Therefore,governments of Yunnan attache great importance to the promotion and development of PPP projects,and has done a lot of work around organizational leadership,policy training,publicity and promotion.Also in 2018,the number of demonstration projects and investment amount of Yunnan Province allowed to enter the China Public Private Partnerships center of the Ministry of Finance ranks first among all of other provinces.Although the promotion and development work of Yunnan PPP projects have achieved remarkable results withhigh average amount of projects,but the total scale of Yunnan PPP projects is still at a medium level and the landing rate significantly falls behind the national average level.The paper first analyzes advantages of PPP projects in reducing government debt,prompting project management level and improving the quality of public product supply,then further points out the necessity that governments must guide banks to participate in PPP projects,and the urgency of the participation of Yunnan government.Although the construction of PPP projects at this stage is largely influenced by the central government,local governments still have great autonomy in project implementation,assessment and guidance of policy funds.If the local government can give full play to these autonomy,it can further standardize the project participation environment and implementation process,and it can promote the participation of banks to a certain extent.Therefore,this paper analyzes from the perspective of local government,and further discusses that Yunnan PPP projects generally have the characteristics of the low income and long cycle,which is different from the bank loan yield expectation,and conflict with the bank’s short-term credit demand,which made banks especially focusing on profit difficult to join in Yunnan PPP projects.As the main body of China’s financial system,commercial banks are the main financing targets of Yunnan PPP projects.If they can’t improve their participation in Yunnan PPP projects,it is difficult to solve the financing problems of current Yunnan PPP projects to prompt and develop further.This paper firstly discusses the advantages of PPP projects in reducing government debt,promoting the transformation of government functions,and improving the quality and efficiency of public goods supply,based on the theory of government-led banks’ participation in PPP project research.From this,it is derived that Yunnan should reduce government debt.To break the infrastructure lag problem,the promotion and development of PPP projects is the most effective way.After that,it further analyzed the necessity of the government to guide banks to participate in PPP projects,and the urgency of the Yunnan government to guide banks to participate in PPP projects.Although the construction of PPP projects at this stage is largely influenced by the central government,local governments still have great autonomy in project implementation,assessment and guidance of policy funds.If the local government can give full play to these autonomy,it can further standardize the project participation environment and implementation process,and it can promote the participation of banks to a certain extent.Therefore,this paper analyzes from the perspective of local government,and further discusses that Yunnan PPP projects generally have the characteristics of low yield and long period of time.The lower project yield and bank loan yield are expected to be different,and the longer project cycle is related to the bank.There are contradictions in the short-term and short-term credit demand,making it difficult for banks,especially for profit-making commercial banks,to join the Yunnan PPP project.As the main body of China’s financial system,banks are the main financing targets of Yunnan PPP projects.If they can’t improve their participation in Yunnan PPP projects,it is difficult to solve the financing problems of current Yunnan PPP projects,making it difficult to get further promotion and development..On the basis of this discussion,this paper starts from discussing the status of Yunnan government’s guidance of banks participating in Yunnan PPP projects and the existing problems,then combines various factors to analyze the whole life cycle of Yunnan PPP projects with the performance assessment.Along with applying the assessment results to relevant payment links,it can change Yunnan PPP projects from valuing construction to valuing operation.With the cooperation of goverments and banks to solve the long-term problem of Yunnan PPP projects,that is to standardize and improve the implementation process of Yunnan PPP projects,and encourage banks to innovate financing model by participating in Yunnan PPP projects with means of syndicated loans,etc.,which can effectively alleviate the contradiction between the long-term cycle of Yunnan PPP projects and the short-term credit demand of banks.From the play of the policy banks in Yunnan PPP projects to the commercial banks,that is to establish a new mechanism of cooperation among governments,banks and guarantee companies in Yunnan PPP projects,we will amplify the guiding role of policy banks,and thus incite the flow of commercial bank funds into the Yunnan PPP projects to solve its financing dilemma and give constructive comments about how governments effectively guide banks to participate actively in Yunnan PPP projects.