The Strengths And Weaknesses Analysis Of PPP In China On Institutional Change

Since the reformation and opening up in China, the economy developed rapidly, and the urbanization scale increased gradually. However, according to the needs of economic development and the needs of the people’s living standards, the construction of infrastructure obviously lags behind. In1980s, the introduction of the PPP (Public-Private Partnership) model gave a new pattern of infrastructure construction in China. Over a period of time, it seemed to solve the lack of funding of infrastructure construction to the government, but due to the lack of relevant project work experience in our country, the system and mechanism was not perfect at that time, at the same time, the lack of stability of private enterprises participants, and the opportunistic behavior in the PPP model infrastructure or in providing related services, and government officials’dereliction of duty in cooperation with the private sectors, from above all, these factors caused operation problems of a large number of PPP project, so government sectors and the private sectors have to renegotiate. In this case, the fund shortage problem of the government infrastructure construction is still not solved, instead, to a great extent, it increases the transaction costs of the PPP project, making some trouble to the use of this model in China.In recent years, with the promotion of the comprehensive strength of state-owned enterprises in China, it is obvious that a large number of infrastructure PPP projects are awarded to the trend of the state-owned enterprises, and gradually form the infrastructure construction of PUP (Public-Public Partnership) model. This paper, based on the perspective of system evolution, aims to analyze and explain the influenced factors which promote the evolution of PPP to PUP model.First of all, on the basis of new institutional economics system, such as the transaction cost theory, to analyze the infrastructure construction model evolutionary path-dependence; secondly, the paper discusses the definition of the PPP model, including its development, origin and the introduction background and development process of PPP model in our country, at the same time, to make a comparative analysis among the BOT,PFI and PPP model which appeared in the evolution process of the PPP model; thirdly, based on PPP project cases in China, the author summarizes the failure factors affecting the PPP projects, through the AHP method, in order to refine the key influence factors, the paper make an analysis of key factors of the PPP model to PUP model evolution path; finally, the author uses the SWOT method to analyze the application of the advantages and disadvantages of PUP model for infrastructure construction.