A Study On The Privatization Of Municipal Public Goods Supplies

With the rapid development of socialist market economy and the increasingly deepening of reform since 2000, China's government pays much more attention to the encouragement of social investment into the supply of municipal public goods. Ministry of Housing and Urban-rural Development of the People's Republic of China (MOHURD) issued two regulations one after another, which are "Suggestion on Quicken the Adoption of Market Principle for Municipal Public Services" and "Supervising Measures on the Franchise of Municipal Public Services". Besides, the Third Plenary Session of the 16th Central Committee of the Communist Party of China (CPC) stated clearly that "Social capital is permitted to enter into infrastructure, public services and other industries and fields which are not prohibited by laws and regulations ". Those policies promote greatly the privatization process of municipal public goods supplies.However, the policies and systems established by the government only raise some guidance on the privatization of municipal public goods supplies, but no theoretical analysis or guidance on the details of this issue is given. The privatization is so far but "a newborn baby" to many government officials and private investors. In many places, there is still the randomness of privatization and a lack of a good understanding of the approaches and forms of achieving it. This paper theoretically analyzes two types of approaches and defines the scopes and deciding factors to realize the two approaches. In view of the current conditions in China, the paper advocates that rather than take a large-scale privatization, the government and private sectors should cooperate (public-private partnerships) to supply municipal public goods. In determining the approaches to realize the privatization of municipal public goods supplies, the paper also holds that the forms and extent of privatization should vary with different types of public goods. With theoretical development and innovation, more and more privatization forms arise. Meanwhile, there are many reforms in western developed countries worthy learning from. However, due to different national conditions, we cannot transfer and apply the forms of privatization of foreign countries mechanically, but choose the proper forms of privatization suitable to China's national conditions according to the current situation in China.Incontestably, there are still many problems in the practice of privatization of municipal public goods supplies in western countries in early years and in China now. It has become our major task to solve these problems. This paper puts forwards the solution to the problems through the theoretical analysis on the approaches of the privatization of municipal public goods supplies. Furthermore, this paper discusses the policies and measures to perfect the reform of the privatization in China.