Both India and China have been promoting Public Private Partnership in delivering infrastructure in various sectors. This paper examines their current infrastructure condition both in terms of quality and investment and therefore understands the driving factors of them using PPP. It compares and contrasts the characters of PPPs in India and China. India prioritizes in transport and energy while China puts its emphasis in public services. SOEs have a bigger presence in PPPs in China while foreign investors have more space in India.
The main reason for India using PPP is the gap between government fiscal capacity and the increasing infrastructure demand; while in China, the key is innovation, in the sense that private sector has better technology and management skills in tackling sophisticated issues such as water treatment and elderly care. China takes a top-down approach in the promotion of PPP while India, in the national level, also takes a top-down approach but has to take a bottom-up approach in the state level.
The paper also discusses some of the major challenges for both countries including human resources, regulatory and legal framework and financing gap. The author is cautiously optimistic about the future of PPPs in both countries given the fact that both governments having been taking actions to address the challenges although these challenges are quite daunting.