Our Correspondent
Beijing
Chinese scholar Cheng Xizhong praised high the recently launched Housing projects in Pakistan, hoping these would help addressing residential problem of the poor people and will encourage public-private partnership.
In an article published in China Economic Net on Monday, he said, this initiative should be highly appreciated because the intention of the government is to improve housing conditions for ordinary people.
The government is following public-private partnership (PPP) or joint venture. The concept was first worked out by the British government in 1982. It refers to a long-term agreement between the government and private sector, authorizing private enterprises to build, operate or manage public infrastructure and public services on behalf of the government.
According to Cheng Xizhong, China introduced the PPP model in 2013 and a series of PPP-related policies were promulgated intensively. The aim is to form a partnership between the government and the private sector in terms of “benefit-sharing, risk-sharing and full cooperation,” encourage and guide social capital to participate in the construction and operation of infrastructure and public utilities, and improve the quality and efficiency of public services.
However, there are five main risks in terms of PPP; namely policy risk, technology risk, finance risk, exchange rate risk and operational risk. Different projects may have one or more of these risks, so both the government and investors should make a comprehensive analysis and risk assessment before starting a project.
Before China’s reform and opening up, it also faced serious housing problems, especially in Shanghai, where three generations of a family could be found living in a single, small house. Due to the government’s policies and good business environment, China’s real estate industry has developed rapidly. The development of this industry has not only solved the housing problem of the whole nation, but has also stimulated the rapid development of China’s economy.
From China’s development experience, Pakistan’s potential and possibility for rapid development can definitely be seen.
In his perspective, the government’s housing scheme may solve the housing problem of some low-income families to a certain extent, but to solve the housing problem of the whole country fundamentally, we have to follow the road of a market economy and vigorously develop the real estate industry, and the development of real estate will surely drive the national economy onto a rapid development track.
Cheng Xizhong cited an example of his hometown, Nantong, Jiangsu Province, is renowned for architecture and construction. There is an abundance of skilled workers. Young and middle-aged people have all joined the construction companies.
They are engaged in real estate development not only in China, but also in other parts of the world. The development of this industry has also led to the industrialization of Nantong. The industrial output value accounts for more than 70% of the total GDP. In 2018, the per capita GDP reached 15,685 U.S. dollars.
He believes that as long as Pakistan strives to create a good business environment, Chinese real estate development enterprises will surely enter Pakistan and help Pakistan develop its real estate. Within a few years, the housing problem of the Pakistani people will be solved. Moreover, the large-scale development of the real estate industry will certainly drive the Pakistani economy onto a rapid development track.
Cheng Xizhong, Special Commentator of China Economic Net, visiting Professor at Southwest University of Political Science and Law and Senior Fellow of the Charhar Institute.
