TY - JOUR
T1 - Financing China’s unprecedented infrastructure boom
T2 - the evolution of capital structure from 1978 to 2015
AU - Zhao, Jerry Zhirong
AU - Su, Guocan
AU - Li, Dan
PY - 2019/11/17
Y1 - 2019/11/17
N2 - The authors examine the sources of the funds that have financed China’s infrastructure development since 1978. They define the five periods in which this development has taken place in terms of predominant financing: fiscal funds, build-operate-transfer (BOT), treasury bonds, the land financing, and local bonds. The system is characterized by a heavy reliance on debt financing and one-off revenues. These approaches have raised widespread concerns about fiscal sustainability in China. The authors explain why a shift towards the more conventional approach of fiscal funds is necessary. IMPACT: China’s infrastructure development since 1978 has been characterized by a heavy reliance on debt financing and one-off revenues. The model raises the concern about the country’s long-term fiscal sustainability. China should shift towards the more conventional approach of using fiscal funds to support infrastructure.
AB - The authors examine the sources of the funds that have financed China’s infrastructure development since 1978. They define the five periods in which this development has taken place in terms of predominant financing: fiscal funds, build-operate-transfer (BOT), treasury bonds, the land financing, and local bonds. The system is characterized by a heavy reliance on debt financing and one-off revenues. These approaches have raised widespread concerns about fiscal sustainability in China. The authors explain why a shift towards the more conventional approach of fiscal funds is necessary. IMPACT: China’s infrastructure development since 1978 has been characterized by a heavy reliance on debt financing and one-off revenues. The model raises the concern about the country’s long-term fiscal sustainability. China should shift towards the more conventional approach of using fiscal funds to support infrastructure.
KW - Capital structure
KW - debt financing
KW - infrastructure finance
KW - public budgeting
KW - public–private partnership (PPP)
UR - http://www.scopus.com/inward/record.url?scp=85067894471&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85067894471&partnerID=8YFLogxK
U2 - 10.1080/09540962.2019.1621049
DO - 10.1080/09540962.2019.1621049
M3 - Article
AN - SCOPUS:85067894471
SN - 0954-0962
VL - 39
SP - 581
EP - 589
JO - Public Money and Management
JF - Public Money and Management
IS - 8
ER -
