The Legislative Defects of Public-Private Partnership in China and Lessons Drawn

Abstract

Over the recent decades of economic growth, the Public-Private Partnership (PPP) has been an emerging business model for the Chinese government to establish an efficient relationship with the private sector for public policy. However, there exist obstacles to truly implementing a PPP in place. Apart from inexperienced PPP implementation, the lack of appropriate legal guidance is another major barrier to carrying out a PPP project. A shortage in a well-structured legal system, encompassing relevant legislative deficiency, leaves the scholars the duty to navigate the way for enhancing legislative structure for PPP. Even loads of research have been done on defining the role of the government and the private capital, in hopes that the risk-bearing process involved in a PPP project would be properly designed. But little discussion thereof has been carried out, combining the analysis with the legal nature of public-private partnership itself. Therefore, this paper presents a theoretical framework for examining the legal nature of PPP and analyses the legislative defects regarding PPP with a case. In this paper, the fragmented nature of PPP legislation in China is figured out, pointing to the absence of laws with higher hierarchies regulating PPP, which reveals the vague legal nature of PPP contracts and little legal constraints on the government. What is also surfaced from the fragmented and chaotic PPP legislative state is the ill categorized legal nature of the government, with overlapping roles from different governmental departments, exacerbating the unevenly distributed risks imposed on different parties involved in PPP. This paper then ends with conclusions extracted from experience drawn from both inside and outside China, particularly making an analogy with France, and stresses the need to build a more detailed and logically clarified legislative system for PPP.