The Effects On The Market Risks Of Infrastructure REITs In China

The COVID-19 pandemic has brought an impact on Chinese domestic economy.Against the backdrop of the pandemic,China is pursuing the development philosophy of steadily promoting modem economy and industrial upgrading via efficient,safe and green improvement in infrastructure.Infrastructure project has long been cash-starved,financing and capital withdrawal channels restricted.Chinese government has established the Public-Private-Partnership mechanism for meeting massive financial demands,pooling government risks and reducing financial pressures.However,with the widespread use of PPP(Public-Private-Partnership)mechanism,the financial instrument scarcity,uneven resource disposition and imperfect policy mechanism loom large.In addition,the transformation to social capital of funding resource is not founded.To reduce the debt pressures of government and enterprises,deepen the financial supply-side structural reform and dig for the capital strength,improving infrastructure REITs in China is the way forward.The official issuance of 11 infrastructure REITs is a big shot in the arm for the financial market development and steady recovery in China.A variety of improving policies have been implemented based on the infrastructure REITs market in China,which is regarded as a potential tera-scale market named ’blue ocean’.Although the policies provide a strong support of constructing a diversified financing platform for developing infrastructure REITs in China,as financial products,their market risks are real.To form a good development pattern,it is particularly important to confirm and analyze the market risks of infrastructure REITs in China,and then propose some risk-guard control policies.Firstly,with giving the related concepts of infrastructure REITs and theories of its market risks,this study concludes the research findings of REITs’ market risks by literature review.Secondly,according to the developing status,operating models and characters of infrastructure REITs in China,this study identifies its market risks and concludes the correlative risk characters,paving the way for the standardized analysis of its impacts.Thirdly,this study proposes an OLS regression model to make an empirical study on market risks of infrastructure RETIs in China,and then verifies the results through correlation and significance tests.Finally,with summing up the research result,this study offers some suggestions from two perspectives:risk prevention and control,which is tended to offer a useful reference for future steady development of infrastructure REITs in China.