Abstract

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Findings indicate that PPPs significantly improve water utilities’ performance in the People’s Republic of China by reducing subsidy ratio, number of employment, and improving total factor productivity.

This analysis of the water utilities in the People’s Republic of China has confirmed the potential benefits of public-private partnerships (PPPs) in infrastructure. A study of water utilities in 300 prefecture-level cities, over a period in which the share run as PPPs rose from 8% to almost 40%, found that PPPs improved performance. Urban water utilities run as PPPs were more efficient than conventionally-run water utilities. PPPs were more productive, required less subsidies (and this was not a result of higher charges), and had lower labor costs. Many of the PPPs in the People’s Republic of China’s water sector have mixed private-state ownership. PPPs with majority private ownership had better impacts than those with minority private ownership.​