Legal Framework Of PPP In China

PPP(Public-Private Partnership) takes a definite advantage to meet the public infrastructure construction, improve the efficiency of investment and management. Recent years, PPP is getting increased use in infrastructure construction of transportation, metro, water affairs, and energy, and also has an active exploring in public utility and land reserve. Many local governments have adopted and utilized PPP as a financing mode in the circumstance that the local government has difficulty to bear the investment in infrastructure and municipal utilities only depending on itself financing resource due to the unequal between central and local financial authority and powers. However, although PPP has an important sense for improving the status of funds shortage in infrastructure construction, the government is still short of PPP practice experience and need to handle the difficulties in government role change, project appraisal uncertainty, shortage of project confirm and private entity entry standard, risk controlling and partaking mechanism imperfect and lack of professionals, and further, the government has to face onerous debts, because the single governmental financing investment model has been adopted in infrastructure construction for many years. Therefore, a legal framework of PPP to protect public interest, which can both guide and specify the governmental utilization and inspection of PPP and encourage and protect private fund to participate in PPP, should be necessary to be established in China.This article will represent the analysis of PPP's theory and problems that PPP applies in China by way of discussion in PPP's definition function, legal relationship, governmental authority, entrance conditions, project assessment, risk partaking mechanism, financial inspection,re-negotiation and dispute solution mechanism during the course of contract performance, and further explore the legal framework of PPP as a part of Economic law in China, which is expected to set up a legal system by legislation to specify governmental authority and encourage and protect private entity, an innovated finance system in macrography and market entrance system, project assessment system, investment return system and pricing system in micrography, and introduce the PPP related franchise system, specify project return and subsidies system and strengthen public inspection system on PPP and project pricing.