China urging private firms to invest more in cross-border infrastructure – South China Morning Post

China’s Initiative to Boost Private Sector Participation in Infrastructure Projects

Overview

At the Asia Infrastructure Investment Bank (AIIB) annual meeting held in Beijing, China’s Minister of Finance, Lan Foan, announced significant measures to encourage private enterprises to engage in infrastructure projects, particularly cross-border connectivity initiatives. This move aligns with global efforts to achieve the Sustainable Development Goals (SDGs), especially those related to infrastructure, economic growth, and partnerships.

Context and Challenges

Lan highlighted the current global economic slowdown and the decline in international development aid, which have constrained developing countries’ public resources for connectivity investments. This situation poses challenges to achieving SDG 9 (Industry, Innovation, and Infrastructure) and SDG 17 (Partnerships for the Goals).

Strategic Priorities

1. Mobilising Private Capital: Emphasizing the urgent need to harness private sector potential for cross-border infrastructure development.
2. Building Sustainable Financing Mechanisms: Developing financial structures that support long-term infrastructure projects, contributing to SDG 8 (Decent Work and Economic Growth).

Legal and Policy Framework

The recently enacted Private Economy Promotion Law serves as a foundation to encourage private enterprises to invest in infrastructure. China is committed to enhancing its systems and environment to facilitate greater private sector involvement in cross-border connectivity projects, supporting SDG 9 and SDG 17.

Risk Management and Investor Confidence

• Addressing geopolitical and default risks to alleviate private sector concerns.
• Improving project ratings and expected returns through collaboration with regional development institutions.

These efforts aim to sustain investor confidence, ensuring continuous private capital flow into infrastructure development.

Expected Impact

By mobilising private capital, China aims to overcome the bottleneck caused by insufficient public investment in infrastructure. This initiative supports the achievement of multiple SDGs, including:

• SDG 9: Building resilient infrastructure and promoting inclusive industrialization.
• SDG 8: Sustaining economic growth through enhanced infrastructure.
• SDG 17: Strengthening partnerships to mobilize resources for sustainable development.

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 9: Industry, Innovation and Infrastructure
   • The article discusses infrastructure projects and cross-border connectivity initiatives, directly relating to SDG 9 which aims to build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation.
2. SDG 17: Partnerships for the Goals
   • The emphasis on mobilizing private capital, improving financing mechanisms, and coordinating with regional development institutions aligns with SDG 17, which focuses on strengthening the means of implementation and revitalizing global partnerships.

2. Specific Targets Under Those SDGs

1. Targets under SDG 9:
   • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being.
   • Target 9.3: Increase the access of small-scale industries and other enterprises to financial services, including affordable credit and their integration into value chains and markets.
2. Targets under SDG 17:
   • Target 17.3: Mobilize additional financial resources for developing countries from multiple sources.
   • Target 17.7: Promote the development, transfer, dissemination and diffusion of environmentally sound technologies to developing countries on favorable terms.
   • Target 17.9: Enhance international support for implementing effective and targeted capacity-building in developing countries to support national plans to implement all the sustainable development goals.

3. Indicators Mentioned or Implied to Measure Progress

1. Indicators related to SDG 9:
   • Indicator 9.1.1: Proportion of the rural population who live within 2 km of an all-season road (implied by focus on connectivity and infrastructure development).
   • Indicator 9.3.1: Proportion of small-scale industries in total industry value added (implied by private sector participation and investment in infrastructure).
2. Indicators related to SDG 17:
   • Indicator 17.3.1: Foreign direct investments (FDI), official development assistance and South-South cooperation as a proportion of total domestic budget (implied by mobilization of private capital and financing mechanisms).
   • Indicator 17.17.1: Amount of United States dollars committed to public-private and civil society partnerships (implied by emphasis on private sector participation and partnerships with regional institutions).

4. Table of SDGs, Targets and Indicators

Source: scmp.com