Financing urban infrastructure : a case of Xi'an, China

Abstract

This research examines how urban infrastructure is financed in Xib an City during the last 60 years. Based on the literature review, the study builds up three urban infrastructure financing models for different periods:a)1949-1978, a centrally planned model based on the Soviet experience where infrastructure was funded by taxes and enterprise profits.b)1978-2000, a public finance model during the experimental stage with free market principles where the local government became the key initiator and used a number of financing sources, including taxes, fees, intergovernmental transfers, and loans.c)2000-present, a public corporation model with private participation where Xib an Infrastructure Investment Group (XIIG) was established as the central actor. It receives revenue transfers, obtains loans and corporate bonds, and sponsors project finance.The case study also considers the risks and its management in the public corporation model.