Research On The Application Of PPP Model In Construction Of Pension Institutions

Since the one-child policy applied in1970s, three membered family structure domains to the society. Many of them get married and the crucial fact is that they have to take care of two parents, two parents-in-law and one child under busy schedules with stress as well as ruthless competition. A lot of social issues are brought into the life because of insufficient time and effort together with generation gap, and more attention is paid on the life of these elderly. When the issue of caring the elderly is mentioned in the meeting of the Third Plenary Session of the16th National Committee of the Chinese People’s Political Consultative Conference in2003, the government leaders attach great importance to this.In recent years, the Ministry of Civil Affairs and local civil affairs departments at all levels develop and encourage the private sector to particapate in old-age care institutions from all aspects of the society. The key to the international response to the aging, is promoting the construction and operation of pension institutions to the transformation of social. In this process,private capital participation is a very important means. The pension mechanism seems to be a high profit investment field,but it is not, ultimately because, there is no way to guarantee the lowest income and basic project returns. The private sector to pursue the utility maximization of their own, but the construction of the organization is not yet a mature investment field, on the premise of unable to guarantee the basic income, only make the great efforts to reduce operating costs, it can provide enough power for private capital into the construction of endowment institutions field, let the private capital broke its strength in the wave of economic development. PPP mode as a kind of innovation of construction and operation of pension institutions, it is also getting general attention and recognition. In PPP mode, the government and private sectors share the risks and profit. They can maximize the strenghs of both parties in providing public services. The principle characteristic of PPP:getting their desired interests through cooperation, sharing risk and burden. So the government can put main energy and resources into plannning,performance supervision, contract management, rather than on the service of manage and provide directly. With the increase of aging population,the shortage of pension institutions supply issues once again highlighted, relying on government’s financial strength will be unable to meet the huge investment of pension institutions, and the government may also bear a huge deficit risk, this will provide a good opportunity for the social forces to participate in the construction of organization. Build high standard pension institution, fill the shortage of pension institutions is imminent. The government should give preferential policies in land and policy and so on, mobilize the enthusiasm of the community, encourage the private sector into the construction of old-age care institutions, develop the industry of pension service, accelerate the development of pension institutions and senior industry.This paper analyzes the present situation of population in China, the problems that pension has and the responsibilities of the government and private sector that PPP model applied to the pension building, and at last,put forward some suggestions about the application of PPP in China. PPP model is applied to the construction of old-age care institutions, not only can reduce the financial burden of the government, but also can solve the supply problem of old-age care institutions to some extent. Visible it has important significance that introduce PPP model to the construction of old-age care institutions.This paper is divided into five parts:Part I, Introduction.Introduce the background and meaning of this paper;a brief description of research status about PPP, research methods,innovation and deficiency.Part II, the related the theories of PPP model. The basic theory of PPP model are public goods theory,property right theory and pricipal-agency theory.Part III, the basic facts about old-age care institutions in China. This paper analyses the status of China’s population and pension institutions. At the same time, it points out the problems of pension institutions inChina.Part IV, the advantages and the disadvantages and the construction of constrction of PPP model in pension institutions building. This paper discusses the advantages and the disadvantages of PPP model in pension institutions building, sum up the proposals. Analyses an application case of PPP model. Part V, the main types of application of PPP model in the pension institutions in the construction and related suggestions. This part mainly makes a comparative analysis to the government builds and privately oprated, handles fairly privately operated, managed by the people and subsidized by the state purchase program. On the basis of the above discussion,puts forward six targeted suggestions.