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China Hand Chapter 12 Infrastructure

  • ID: 2138664
  • Report
  • Region: China
  • 160 Pages
  • The Economist Intelligence Unit
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Growth in China's infrastructure spending has been slowing, with fixed-asset investment in January-October 2016 up by just 8.3% year on year. China's efforts to pump prime its economy through infrastructure spending at a critical period when it was affected by the global financial crisis in 2008-09 proved broadly successful but left a legacy of debt, with the benefit of further fiscal stimulus diminishing over time. While the government remains committed to the use of stimulus on a selective basis to keep GDP growth on a target trajectory, its long-term goal is to make China less dependent on infrastructure spending as the primary driver of growth. Authorities are therefore reluctant to commit to major stimulus programmes on the scale seen in the past.

Another long-term government goal is to shift some of the burden for infrastructure financing to the private sector. Since the second half of 2014 the government has announced a series of regulatory and policy initiatives aimed at encouraging private sector financing of infrastructure projects, in particular via a public-private partnership (PPP) funding model. Both the Ministry of Finance and the National Development and Reform Commission have issued new guidelines concerning PPP agreements that aim to help local governments and private investors share risk in an efficient and reasonable way.

Various types of PPPs are promoted, including franchises, build-operate-transfer (BOT), build-own-operate (BOO) and build-own-operate-transfer (BOOT). In practice, however, interest from private investors has remained lukewarm. Most public projects offer poor returns and involve dealing with local government bodies that are unaccountable, unreliable and poorly versed on requirements for assessing and executing construction projects. The government will continue to struggle to attract private capital to infrastructure projects until it is willing to offer returns that are competitive with those available in other asset classes.
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China Hand Chapter 12 Infrastructure

Chapter 12: Infrastructure: China's provinces and their capitals

Chapter 12: Infrastructure: Section 1: Executive summary
Roads
Rail
Aviation
Power
Water treatment
Shipping
Telecommunications

Chapter 12: Infrastructure: Section 2: Roads: Overview

Chapter 12: Infrastructure: Section 2: Roads: Highway-building policy
Administrative responsibility
Road safety

Chapter 12: Infrastructure: Section 2: Roads: Road financing

Chapter 12: Infrastructure: Section 2: Roads: Privatisation and foreign investment

Chapter 12: Infrastructure: Section 3: Rail: Overview
Rail spending rebounds

Chapter 12: Infrastructure: Section 3: Rail: Rail authority
Rail financing
Private investors are discouraged by low returns

Chapter 12: Infrastructure: Section 3: Rail: Passenger rail

Chapter 12: Infrastructure: Section 3: Rail: Freight rail

Chapter 12: Infrastructure: Section 3: Rail: Rolling-stock production and track building

Chapter 12: Infrastructure: Section 3: Rail: Subways and light rail

Chapter 12: Infrastructure: Section 4: Aviation: Overview

Chapter 12: Infrastructure: Section 4: Aviation: Aviation authority

Chapter 12: Infrastructure: Section 4: Aviation: Domestic airlines
Private airlines

Chapter 12: Infrastructure: Section 4: Aviation: Air freight

Chapter 12: Infrastructure: Section 4: Aviation: Foreign aircraft purchases
Aircraft Leasing

Chapter 12: Infrastructure: Section 4: Aviation: Regional services

Chapter 12: Infrastructure: Section 4: Aviation: Domestic aircraft manufacturing
Foreign plane makers outsource in China

Chapter 12: Infrastructure: Section 4: Aviation: Aircraft maintenance

Chapter 12: Infrastructure: Section 4: Aviation: Airports
Airport Investment

Chapter 12: Infrastructure: Section 4: Aviation: Air-traffic control

Chapter 12: Infrastructure: Section 4: Aviation: Safety

Chapter 12: Infrastructure: Section 4: Aviation: Personnel training

Chapter 12: Infrastructure: Section 5: Power: Overview
Power authorities

Chapter 12: Infrastructure: Section 5: Power: Price reform
Grid interconnections
Ultra-high voltage grids

Chapter 12: Infrastructure: Section 5: Power: Mineral fuel sources
Coal
New emissions limits
Industry consolidation continues
Gasification problems
Oil
Investment in foreign energy assets
Pipeline expansion
Strategic reserves
Natural gas
Gas imports grow
LNG imports slacken
Overseas gas investment
Shale and coal-bed gas
Slow expansion of city gas

Chapter 12: Infrastructure: Section 5: Power: Renewable energy

Chapter 12: Infrastructure: Section 5: Power: Wind power

Chapter 12: Infrastructure: Section 5: Power: Solar power

Chapter 12: Infrastructure: Section 5: Power: Hydropower

Chapter 12: Infrastructure: Section 5: Power: Nuclear power

Chapter 12: Infrastructure: Section 5: Power: Nuclear-power authorities

Chapter 12: Infrastructure: Section 5: Power: Power financing

Chapter 12: Infrastructure: Section 5: Power: Foreign participation

Chapter 12: Infrastructure: Section 6: Water treatment: Overview
Shortages abound
Pollution concerns
Government policy

Chapter 12: Infrastructure: Section 6: Water treatment: Price reforms
A pricing formula
Water supply projects

Chapter 12: Infrastructure: Section 6: Water treatment: Water-treatment and supply

Chapter 12: Infrastructure: Section 6: Water treatment: Financing options
Foreign activity in water deals

Chapter 12: Infrastructure: Section 7: Ports and shipping: Overview

Chapter 12: Infrastructure: Section 7: Ports and shipping: Domestic shipping lines

Chapter 12: Infrastructure: Section 7: Ports and shipping: China COSCO Shipping Group

Chapter 12: Infrastructure: Section 7: Ports and shipping: Shipbuilding

Chapter 12: Infrastructure: Section 7: Ports and shipping: Port-development plans

Chapter 12: Infrastructure: Section 7: Ports and shipping: Shanghai

Chapter 12: Infrastructure: Section 7: Ports and shipping: Ningbo

Chapter 12: Infrastructure: Section 7: Ports and shipping: Qingdao

Chapter 12: Infrastructure: Section 7: Ports and shipping: Tianjin

Chapter 12: Infrastructure: Section 7: Ports and shipping: Dalian

Chapter 12: Infrastructure: Section 7: Ports and shipping: Guangzhou
Expansion at Nansha

Chapter 12: Infrastructure: Section 7: Ports and shipping: Shenzhen

Chapter 12: Infrastructure: Section 7: Ports and shipping: Inland waterways
River traffic on the rise
Yangtze expansion

Chapter 12: Infrastructure: Section 7: Ports and shipping: Financing and foreign investment

Chapter 12: Infrastructure: Section 8: Telecommunications: Overview
Industry restructuring
Foreign investors granted limited access

Chapter 12: Infrastructure: Section 8: Telecommunications: Telecoms authority
Lower prices a priority

Chapter 12: Infrastructure: Section 8: Telecommunications: Fixed-line operations
Fixed-line issues

Chapter 12: Infrastructure: Section 8: Telecommunications: Mobile communications
Internet services drive mobile businesses

Chapter 12: Infrastructure: Section 8: Telecommunications: Handsets

Chapter 12: Infrastructure: Section 8: Telecommunications: Internet
A shopping bonanza
Game hosting remains highly lucrative
Network infrastructure

Chapter 12: Infrastructure: Section 8: Telecommunications: Telecoms equipment

Appendix: Laws and regulations affecting infrastructure
Telecommunication Regulation of the People's Republic of China (2016 Revision) *
Chapter I General principles
Chapter II Telecommunication business and market
Chapter III Telecommunications services
Chapter IV Telecommunications infrastructure building
Chapter V Telecommunications security
Chapter VI Penalties for violations of the Regulations
Chapter VII Miscellaneous
Notice of the Ministry of Industry and Information Technology on Removing the Restrictions on Foreign Equity Ratios in Online Data Processing and Transaction Processing (Operating E-commerce) Business *
Measures for the Administration of Concession for Infrastructure and Public Utilities *
Chapter I General Provisions
Chapter II Conclusion of Concession Agreements
Chapter III Performance of Concession Agreements
Chapter IV Modification and Termination of Concession Agreements
Chapter V Supervision, Administration and Public Interests Guarantee
Chapter VI Dispute Resolution
Chapter VII Legal Liability
Chapter VIII Supplementary Provisions
Opinions of the Ministry of Industry and Information Technology and the Shanghai Municipal People's Government on Further Opening Up the Value-Added Telecommunication Services in the China (Shanghai) Pilot Free Trade Zone *
Editor's note: The following laws and regulations are with previous Infrastructure chapters.
Appendix: Laws and regulations affecting infrastructure
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