The central government of China is encouraging insurance firms to invest in public-private-partnership (PPP) projects to help support the economy, according to the country’s insurance regulator.
In an announcement by the China Insurance Regulatory Commission (
CIRC) on Friday, insurers can use their infrastructure investment funds to finance PPP undertakings through debt, equity, or a combination of both.
State media arm
Xinhua reports that the CIRC will prioritize PPP projects related to the central government’s prime economic developments, such as the Belt and Road Initiative, Beijing-Tianjin-Hebei region development, the Yangtze River economic belt and the Xiongan New Area, as well as poverty-alleviation projects.
The Chinese government is turning to PPP, which are joint investments between the government and private enterprises, to fund infrastructure projects due to widespread concerns over soaring local government debt.
In 2016, the amount of PPP projects signed rose more than four-fold compared to 2015, with record-high participation from private businesses in more regions and sectors.
The trend seems to have continued into 2017, with a 28% year-on-year increase in PPP agreements for the first quarter.
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