Research On The Privatization Of Local Public Utilities

The privatization of public utilities refers to that the government transfers the public utilities which are in the charge of public sectors to private sectors by withdrawing capital, entrusting operation and replacing or that the public and private sectors jointly operate the public utilities. Since China’s reform and opening to the outside world, with the rapid economic and social development, transportation, communication, power supply and other utilities are more demanding than ever before. However, the limited financing from the government makes it difficult to provide adequate financial support for large-scale infrastructure construction and investment when the monopolistic business model of public utilities has been unable to meet the development demand. On the basis of drawing on the privatization experiences of foreign countries, China sets about performing the privatization of public utilities, which becomes a decisive measure in the development of public utilities in our country.In the traditional sense, the character of building the infrastructure and other public utilities is a huge investment, a slow capital return and a big risk, so it cannot attract investors’ interest and can only be funded by the government. But with the development of economy, people gradually realize that there are many huge business opportunities in public utilities. Although the public utilities have low profit rate, they have a broad market with relatively stable investment income and small risk. Moreover, with the development of urbanization and economy, there will be a rising demand for public utilities and the market will become broader. Following the development in recent years, the privatization of public services is gradually becoming the trend of the times.The privatization of public utilities has become more popular, but China has not enough experience with immature development in this field and there is still incredible room for studying and exploring. Based on reviewing and analyzing the related theories, this paper analyzes the status Province, in order to provide some guidance for the further development of privatization for Changsha City and other areas in the future.This paper is divided into three parts: firstly, the related concepts and theory of the public utilities privatization are analyzed and defined, this paper analyzes the practice of foreign public utilities privatization in order to learn from their experience, to provide the basis for analysis below; secondly, the specific practice, existing problems and main reasons of the public utilities privatization in Changsha City are discussed to fully understand its status quo; thirdly, it puts forward some suggestions for the specific problems in the process of privatization in Changsha City.