Government Project Investment And Financing Mechanism Reform

Through 20 years of rapid development under Reform and Open-up Policy, and 17 years of arduous negotiations, China eventually gained the WTO entry in November 2001. That erected a milestone on the highway to continuous reform and development. However, a new requirement has been raised according to this situation. That is, at the time when the Chinese market will have to be fully opened to all over the world 5 years later, China must establish a set of mature and effective competitive mechanisms in all fields of economy, which meet the requirement of the WTO. Among these mechanisms, the investment and financing mechanism of government-invested projects is one of the decisive factors which will considerably influence the Chinese Economic continuous growth. Thus, the reform of investment and financing mechanisms for the government-invested projects should be put on top of the agenda either for further reform and open-up or for the requirement of China's WTO membership. From both the theoretical and practical viewpoints, this study in general analyzes the mechanism of China's government-invested projects. Moreover, this dissertation thoroughly discusses the fundamental direction to further the reform of mechanism of China's government-invested projects and provides a set of effective measures. This study consists of 7 chapters and a total of 48,000 characters.Chapter 1 (Introduction) presents the research objectives, questions and background. The main research direction is also introduced, which, in theory and practice, fully identifies the purpose of this dissertation. Chapter 2 summarizes the characteristics and the influence of the government-invested projects to the economy by describing the concepts, category, and the evolution of the managerial methods. Then, the history and presence of the governmental projects managerial modes are also analyzed in aspects of project decision-making, financing and operating management. Chapter 3 exploits the major flaws, and reasons that cause these flaws. Through the analysis of national water project, Chapter 4 illustrates the characteristics of the mechanism of the government-invested projects in foreign countries, and their managerial experience that China can utilize. Chapter 5 is the core part of this dissertation, which identifies the reform measures for China's government-invested projects. Based upon the reform objectives over the investment and financing mechanism which is set up by the Research and Development Center of the State Council, the objectives of the reform should be: establishing the credit evaluation system, eliminating governmental intervention and implementing macro-control over the investors' financing capability. Therefore, it is suggested to implement reform from two aspects: financing and investment. Then, an instructive investment & financing mechanism can be formed. For this, several constructive recommendations are presented for the Chinese government to carry out the next step of the economic reform. First, the leading position of the investment managerial body must be clarified. Second, on the basis of a complete financing evaluation system, a breakthrough in private capital investing in the government projects must be achieved. Third, reforming capital market and actualizing multi-financing mode so that the formation of a free and fair market of the governmental projects can be accelerated.Chapter 6 fully identifies the external environment of the mechanism reform over the government-invested projects, and finds the junction for the reform with regard to the laws, administration, and risk management. Finally, this study concludes that, under currently crucial circumstances, in order to shape up a virtuous circle of inter-departmental correlation, and contribute to the transformation of China's economy from labour-intensive to technology-intensive model, the China must improve the quality and return on investment of the government-invested projects.