Research On Assets Securitization Of Infrastructure In China

The main characteristics of infrastructure investment are large initial investment, long payback period, strong positive externalities and low yields, so private sector generally is reluctant or incapable of investment. Generally speaking, infrastructure investment mainly depends on the budget of government, but with the rapid expansion of investment scale, government budget has failed to meet the requirements so far. Develop diversified financing channel is necessary. Depending on whether to be charged or not, infrastructure can be divided into operating infrastructure and public welfare infrastructure. Operating infrastructure such as toll roads, toll bridges, ports and communication facilities, charges users for fees. And operating infrastructure can be assets-securitized, which is the object of our study.Asset securitization means that an originator combines his assets that lack liquidity, but can generate predictable cash flow income in the future, and release securities for sale to investors in exchange for huge sums of money. Therefore originator successfully liquidizes remnant assets and receives financing, while the capital market obtains high-quality investment targets. In the asset securitization process, standardization makes Securities accepted widely, by spreading risk and improves liquidity. According to the regulatory body, asset securitization business in our country can be divided into two categories, and one is under the supervision of the Banking Regulatory Commission of China using the trust form, namely securitization of credit assets, and the other is under the supervision of the Securities Regulatory Commission of China, by the way of special asset management plan. Asset Securitization of infrastructure in my study belongs to the latter, and the special purpose vehicle (SPV) is a special client asset management plan set up by securities companies or Subsidiaries of fund management companies.The introduction of asset securitization into financing of infrastructure construction, can ease funding shortages of local government in the field of infrastructure construction in the process of urbanization, and promote appropriate development of infrastructure. Although China’s asset securitization has had some practice, but mainly exists in the securitization of credit assets, practice existing in the infrastructure asset securitization is still relatively rare, where problems about laws and regulations, capital market and other aspects exist. According to the existing cases of asset securitization about toll roads and bridges, the study investigates the above mentioned problems and proposes specific measures and recommendations to promote application of asset securitization in the area of infrastructure financing.This study mainly uses the means of theoretical analysis. And this paper attempts to introduce assets securitization into infrastructure investment to broaden the financing channels of infrastructure construction for the government.My study falls into about seven sections, let’s have a brief look:Chapter 1 introduces the significance of the study and study status of assets securitization, and a concise summery of the content of the study.Chapter 2 is about the theory of assets securitization, such as asset securitization basic principles and implementation process, to help us understand the application of asset securitization to infrastructure construction.Chapter 3 says two aspects of theoretical elaborating of the implement of asset securitization in infrastructure construction in China. It elaborates present situation of financing in infrastructure construction, the necessity and feasibility of asset securitization financing in infrastructure construction.Chapter 4 analyzes the existing two asset securitization cases of toll roads and bridges, finds out the problems, and summarizes the specific implementation mode of infrastructure asset securitization.The fifth chapter discusses the difficulties and risks of infrastructure asset securitization from infrastructure, the SPV (SPV), service agencies and accounting tax system.Chapter VI Proposes solutions from aspects of legal system, tax system, the market environment and intermediary service agencies, according to the difficulties and problems mentioned above.The final is the conclusion, a brief summary of the full article and a prospect of the development of assets securitization in infrastructure construction.