sichuan guang’an ppp-based water environment management: lucid waters and lush mountains are invaluable assets
(china economic weekly issue 8 2017)

   “the clear and drinkable water is back,” gong menglan, a villager from chongwang village, guang’an city, sichuan province, told the reporter. 
   known as the hometown of deng xiaoping, guang’an city is located in the northeast of sichuan province, an hour’s drive from chongqing and two hours’ drive from chengdu. in recent years, with rapid social and economic development, water management has become a knotty problem faced by the government. in 2014, the cpc guang’an municipal committee and guang’an municipal people’s government launched the guang’an “clean water action” regional  water environment management project, the first ppp project in sichuan. the past three years registered satisfactory results of the project.  
   since the 18th cpc national congress, general secretary xi jinping has proposed a series of new ideas, viewpoints and theories regarding building ecological civilization. these important ideas, viewpoints and theories lay out a blueprint for the sustainable development of china, and the realization of the chinese dream - the great rejuvenation of the chinese nation. general secretary xi jinping has pointed out, “lucid waters and lush mountains are as important as, and even more important than wealth. actually, lucid waters and lush mountains are invaluable assets.” 
ecological and environmental protection is related to the fundamental interests of the people, and the long-term interests of national development. as general secretary xi jinping said, “environment is the synonym of people’s wellbeing, lush mountains the synonym of beauty, and blue skies the synonym of happiness”. we should protect the environment like we protect our eyes and treat the environment like it is our lives. 
   at the symposium on promoting the development of the yangtze river economic zone held in chongqing in january 2016, general secretary xi jinping noted that restoring the ecological environment of the yangtze river will be an overwhelming task and no large-scale development will be allowed along the river at present and for a rather long period to come. environmental protection shall prevail economic development. 
   as an important ecological shelter and ecologically sensitive protected area in the upper reaches of the yangtze river, guang’an has been actively put into practice the theory of “lucid waters and lush mountains are invaluable assets”. during the “12th five-year plan” period, guang’an’s gdp, total investment in fixed assets, total retail sales of consumer goods, and local government general budgetary revenues and expenditures all maintained double-digit growth. in 2015, guang’an’s regional gdp and fixed assets investment both exceeded rmb 100 billion. in 2016, its growth rates of major economic indicators continued to stand above provincial and national averages. its general public budget revenue was rmb 6.42 billion, up 17.8%, ranking second in sichuan province. guang’an recorded significant improvement in development quality and efficiency. 

cweg’s guang’an second underground wwtp china economic weekly vision center chief photojournalist xiao yi

cweg’s guang’an second underground wwtp china economic weekly vision center chief photojournalist xiao yi

cweg’s guang’an second underground wwtp china economic weekly vision center chief photojournalist xiao yi

     yin li, governor of sichuan province, told china economic weekly that sichuan is an important water conservation area for the yangtze river and yellow river, and its ecological renovation and environmental protection are thus of paramount importance. economic and social development is actually a complicated concept. economic growth is different from economic development. the latter can be felt and enjoyed by the public.  
     “adhering to the concept of ‘lucid waters and lush mountains are invaluable assets’, sichuan has incorporated green development into various aspects and the entire process of economic and social development,” said yin li , “next, we will go all out to carry out “three main campaigns” on pollution, launch the three-year urban wastewater treatment and urban-rural waste treatment infrastructure construction project, and strive to start a batch of major pollution prevention and control projects this year.” 
    from february 14 to 17, following the ministry of finance’s china ppp center investigation team, china economic weekly investigated the implementation of guang’an “clean water action” regional water environment management project, one of the second batch of ministry of finance demonstration ppp projects.
     what is intergrated regional cross-watershedwater environment management? how does the ppp model help the government achieve the goal of “spending less, doing more?” 
       guang’an “clean water action” regional water environment management ppp project background 
       removing fish farming cages for clean water   
      known as the “gateway to eastern sichuan”, guang’an is home to 4.7 million people living across 6,344 with jialing river and qu river joining the “golden waterway” of the yangtze river in guang’an, the city is an important ecological shelter and ecologically sensitive protected area in the upper reaches of the yangtze river. 
      years ago, cage fish farming entered the lives of the locals, and quickly became a major source of income for them. however, without management and control, this trend finally led to serious pollution to local water resources.  
     taking quanmin reservoir, the largest reserve water source in guang’an as an example, since 1998 when cage fish farming became popular among the locals, environmental problems followed quickly. as 9,788 cages were crowded into the reservoir which can only carry 250 cages, and fertilizers were used to increase farming efficiency, water quality dropped dramatically, threatening the drinking water safety of over one million people.  
      around 2008, the reservoir turned very dirty and smelly, with bubbles floating on the surface. a large number of fish died. feng qiaoyu, a villager of quanmin village, nongxi town, guang’an district, still remembers this shocking scene.  
     due to blind expansion of cage fish farming, when inflow was reduced, a large amount of organic feed and fish manure at the bottom of the reservoir were fermented in an oxygen-deficient environment, producing a large amount of toxic and harmful gases which caused fatal damage to the fish. more seriously, the water was doubly polluted by organic matter and eutrophication, which posed a hazard to the drinking water safety of millions of people in guang’an. 
        in 2008, hou xiaochun, the then mayor of guang’an city, and present secretary of the cpc guang’an municipal committee, organized more than 30 working groups, and personally visited villagers, publicizing the policy of cage ban. to ensure that the locals’ incomes would not be affected after cages were removed, they launched various projects to economically support the locals. 
     recalling the “tough battle” on cage fish farming, hou told china economic weekly that water management is the core of environmental management. in 2008, due to unqualified water resources, the youth conscription rate in guang’an was not up to standard. under huge pressure, the cpc guang’an municipal committee was determined to take various measures to ban cage fish farming. 
      “my understanding is that when lucid waters and lush mountains become scarce resources and a comparative advantage for development, we can transform ecological advantages into economic advantages. in this way, lucid waters and lush mountains become invaluable assets,” said hou. 
      guang’an “clean water action” regional water environment management ppp project
      rmb 2.951 has been invested in the water management of one city, two districts, three counties, and 108 townships.
      how to solve the conflict between heavy river pollution and the lack of money, human resource, technologies and management skills became a challenge faced by the local government. 
guang’an was upgraded from a district to a city in 1998, and thus is younger than other cities and prefectures in sichuan province. although it registered rapid growth in recent years, its economic aggregate is still small, and financial strength is weak. therefore, water management across the county means a heavy financial burden for the local government. what’s more, its water management was once carried out by a development and landscaping company which can hardly create systematic and scientific management plans.  
     in 2014, after investigating zhejiang’s “management of five waters” project, and guiyang nanming river water environment management ppp project, the cpc guang’an municipal committee and guang’an municipal people’s government decided to launch the “clean water action” plan across the city. 
   hou xiaochun, secretary of the cpc guang’an municipal committee, told the reporter that guang’an, as an economically underdeveloped area, can hardly replicate and promote zhejiang’s funding model that is financially supported by the government. when he was bothered by the funding problem, the guiyang nanming river water environment management ppp project pointed the way out for him. based on site investigations, the government developed the ppp-based “clean water action” plan according to the water management situation of guang’an. cweg competed in the open tendering and won the contract. 
    the project is implemented throughout guang’an, covering one city, two districts, three counties, and 108 townships. as the only regional, cross-basin comprehensive water environment management project in china, it integrates the protection of drinking water sources; the treatment and comprehensive reuse of wastewater; water environment management of inkstone washing pond in deng xiaoping’s hometown tourist area, and xixi river, the mother river of guang’an; and regional rural wastewater management. 
    cweg developed a rmb 2.951 billion integrated project plan, including the construction of eight urban wwtps; the construction and renovation of 104 rural wwtps; and the water environment management of wangjiahe dam, xixi river basin, and deng xiaoping""s hometown tourist area. 
    cweg chairman hou feng told china economic weekly that water environment management is a comprehensive and systematic process. “problems are in the water, but their sources are on the bank.” 
    “there are many watercourses and river basins that need to be managed nationwide. each project we selected meets the following three requirements: first, the project is urgently needed by the local people. second, the local government is actively engaged in the project.  third, we are able to provide the government with high-quality, long-term, stable and value-for-money environmental services in terms of technology, funding and management, and at the same time, have a reasonable rate of return,” hou feng said. 
     highlights of guang’an “clean water action” regional water environment management ppp project    
     it is the first regional, cross-basin comprehensive water environment management ppp project in china, solving the problem of regional overlapping management. 
      during the fieldinterview, the reporter was told that guang’an clean water action project is the only regional, cross-basin comprehensive water environment management ppp projectin china. 

the ministry of finance’s china ppp center, and sichuan provincial department of finance hada meeting with the cpc guangan municipal committee,guangan municipal peoplesgovernment, and cweg, to investigate the implementation of the guangan clean water action regional water environment management project, one of the secondbatch of ministry of finance demonstration ppp projects. china economic weeklyvision center chief photojournalist xiao yi

     all water systems in guang’an are connected with the qu river and jialing river which join theyangtze river in hechuan district, chongqing. as an important water sourceprotection area for downstream chongqing, guangan is atarget of the action plan for prevention and control of water pollution (dubbed 10 measures for water), andnational key river basin management. 
   the highlight of the guang
an clean water action project is that it integrates all river and lake basins in guangan, in a bid to solve water environment management problems acrossthe city. under the project, sub-projects will be conducted to solve waterenvironment management problems in urban guangan, onecounty-level city, two national-level development parks, three counties and 108townships.
   the packaging of heavy asset franchiseprojects, rural wastewater treatment projects, and river/lake/reservoir waterenvironment management projects can not only improve the overall attractivenessof the project to private investors, but also solve the pollution problem onceand for all. what""s more, the project increases the investment efficiency ofthe investor and government, and at the same time, helps the investor optimizethe project from the perspective of the whole region, and upgrade itstechnologies and management model.
   water environment management is asystematic and costly process, exerting great financial pressure on the countyand township governments. the ppp model provides an effective way to solve thefunding problem.
   currently, many water environmentmanagement projects face the problem of overlapping management. for example,regarding the management of a project, the urban management bureau isresponsible for administrative law enforcement, the environmental protectionagency is responsible for effluent supervision, the water resources bureau isresponsible for peripheral flood control, and the housing and constructionbureau is responsible for drainage management. such management model actuallyseriously affects management results. in the guang
an project,to solve the problem of highly segmented management,and overlapping management, the cpc guangan municipal committee and guanganmunicipal peoples government established the cleanwater action ppp project leading group led by the party secretary and mayor ofguangan, with members comprising party secretaries andheads of various counties and districts, and heads of relevant functionaldepartments. under the leading group is the clean water action office composedof finance, housing, water, and environmental protection departments at themunicipal, district and county levels. in this way, administrative proceduresare simplified, greatly improving the governments workefficiency and service level.
   hou xiaochun, secretary of the cpcguang
an municipal committee, summed up some experiencefrom the project. first, the ppp model solves the funding problem. second, theppp model solves the technical problem by leavingprofessional fields to experts. third, a ppp projectis not just about construction - its more aboutcooperative operations over decades after construction.
   in october 2016, the ministry offinance issued the notice on deeply advancing the public-private partnership inpublic service fields (hereinafter referred to as the
   the “notice raises the requirements ofvigorously practicing the structural supply side reform in public servicefields; further strengthening the promotion and application of the ppp model;and making exploration to carry out compulsory pilot programs related to wastewater and solid waste treatment.according to the notice, inother public service fields supported by the central finances, projects withcash flows and meeting service conditions shall be subject to ppp modelidentification, so as to encourage and promote the application of the pppmodel. 
   after investigating the guang
an project, jiao xiaoping, director of the ministry of finances china ppp center, said that ppp-based water environment managementacross guangan is a good practice of the lucid waters and lush mountains are invaluable assets theory proposed by xi jinping.
the pollutionproblem of a water body cannot be solved by just managing the body, but bymanaging the whole drainage basin. to achieve the goal, we need an innovativefinancing model to integrate various types of special funds, leverage fiscalfunds, and mobilize the government, market, and society to jointly solvelong-standing tough problems. guangan clean water action regional waterenvironment management project, as one of the second batch of the ministry offinance demonstration ppp projects, has the value to be promoted nationwide, jiao continued.
     luo zengbin, deputy party secretary and mayorof guang’an, told china economic weekly that aftermore than two years of practice, guangan hascontributed 44 projects covering wastewater treatment, drainage basinmanagement, urban roads, and medical & health with a total investment ofrmb 45 billion to the provincial ppp project library, of which eight projectsworth rmb 10 billion are under construction. 
feasibilityis a focus of us in the process of carrying out ppp projects. after a projectis proposed, the financial department and department managing the project willassess the value for money of the project, and the governments affordability, to make sure that the funds allocated to theproject from the annual budget is affordable for the government, avoiding theoccurrence of new debts, said luo zengbin.
   during the annual meeting of the worldbank held in october 2016, the guang
an clean water action regional waterenvironment management project was introduced to the world as the onlyregional, cross-basin water environment management project in china. foreignexperts highly praised the project. 
    shi yaobin, vice ministerof finance and head of the ministry of finance ppp leadership team, attendedthe meeting. he said in his speech that china’sppp reform features high project quality, innovation, and solid foundation. on the one hand, we actively borrow experience and good practicesfrom countries with mature ppp markets. on the other hand, through the demonstration projects strategy, weencourage green and low-carbon private ppp projects, and has established anational ppp comprehensive information platform to promote informationdisclosure.
   for the guang
anproject, the ppp model saves rmb 650 million investment, and shortensconstruction period by 12 months.   
   why can the ppp mode save investment?
   an insider who has a long career inengineering construction told china economic weekly that in traditional projectmodels, most projects ended up with exceeding over 10% the budget, which ispartially caused by project models. 

   generally, design companiestend to raise project budgets, as long as relevant mandatory requirements(e.g., safety requirements) are met, because they charge a fixed proportion of1% to 2% of the budgets as their design fees. therefore, they have nomotivation to optimize project budgets, or do a lot of pre-constructioninvestigations. insiders always say that 1% investment in design andinvestigations determines the efficiency of the remaining 99% investment.however, currently, design and investigations are low in both costs and quality. 
   according to an audit report onprojects exceeding budgets in a province, among all projects audited, over 60%projects have exceeded estimated budgets, budgets, and/or planned costs, andsome projects even doubled their budgets. this is caused by many reasons, including hasty decision-making beforeimplementation; engineering changes caused by structural errors in drawings dueto the lack of field investigations; underfunding which prolongs theconstruction period; or bidders win contracts at a low price, and then try toincrease costs during construction. 
   jiao xiaoping, director of theministry of finance’s chinappp center, said that in the ppp model, the private participant funds theproject, and the government pays after services are provided. in this case, theprivate participant has to integrate project design, construction, operations,maintenance and utilization considerations into planning, and constantlyincorporate innovative ideas into technologies and management, so that they arelikely to win in competition, and make profits through professional andefficient operations for 10 to 30 years.
   jiao said,
theppp model provides an integrated management method for the public servicesupply chain. it solves the problem of highly segmented management existing intraditional supply models, and prompts the government to shift its focus frominvestment and construction, to operations and services. the ppp reform ismainly a supply-side structural reform, and demand pull only plays a supplementaryrole.” 
    “pppsencourage innovation and multi-plan price comparison. cost performance is thekey index. the government may choose different public service solutionsaccording to its affordability. it is like ordering food at a restaurant. theprices of vegetables and meats are different. such a competitive procurementmethod not only solves the shortage of supply, but also meets the diversifiedneeds of the public, jiao continued.
   taking the guang
an project as an example, after winning the contract, privateparticipant cweg sent a strong technical team for a 6-month fieldinvestigation. besides, together with guangan cleanwater action ppp project leading group, and guanganppp office, cweg took a set of measures to optimize the project plan, technicalprocesses, project location, and construction techniques. thanks to theseefforts, cweg saved rmb 650 million of project costs, and completed the project12 months ahead of schedule. 
   wang yihong, director of the sichuanprovincial department of finance, told china economic weekly that sichuan hadbeen promoting high-quality and standard ppp projects in diverse fields, inaccordance with the four principles that
projectsshould have high regional influence and a high private participation rate;projects should have a constant and steady cash flow and give priority to userpayment; the pricing shall be reasonable and flexible; and the government shallbear clarified expenditure responsibility and reasonably share project risks. 
   in september 2015, the sichuanprovincial people
s government released theimplementation opinions on promoting the ppp model in the public servicesector, where the governments expenditureresponsibility is specified. in the ppp model, the government invests in ratherthan subsidizing projects, and its money goes to supporting operations ratherthan construction. in addition, through strict value for money and financialaffordability assessments; scientific calculation of construction costs,operating costs and profitability; and an integrated payment model encompassinguser payment, government subsidy and government payment, the expenditureresponsibility is clearly defined and limited.
   chen shuping, deputy director of thesichuan provincial department of finance, said that sichuan province had takenactive measures to manage its ppp project library, set up the ppp projectcomprehensive subsidy fund, and formulate the ppp project comprehensive subsidyfund management method. in 2016, the first allocation of rmb 100 millionsubsidies was used in the operating subsidy, supplementary investment, equityinvestment and risk sharing of ppp projects. 

     private participantvoluntarily raises service standards, avoiding renovation right afterconstruction.  
    in the ppp model, the privateparticipant must share risks with the government, which forces it to improveservice quality in the 10-30 years of performance evaluation period. 
    taking the guang""an project as anexample, private participant cweg voluntarily raised effluent standards beforethe higher national environmental protection standards were released, avoidingrenovation right after construction.
    when talking about why cwegvoluntarily raised standards, cweg chairman hou feng told china economic weekly,“our foresight actually comes fromyears of experience in studying the water environmental carrying capacity ofregional drainage basins. simply speaking, we do not build facilities to meetsome standards, but to reasonably maintain the long-term and sustainabledevelopment of an ecosystem according to its carrying capacity.” 
      in 2015, guang’ansecond wwtp project, the largest wwtp in guangan, waslaunched. at that time, the private participant may implement the project inaccordance with the class ia effluent discharge standard (corresponding toinferior class v surface water) provided in the discharge standard ofpollutants for municipal wastewater treatment plant (gb18918-2002) as requiredby the sichuan government. however, through a 6-month scientific investigation,on-site pilot tests and expert analysis, cweg found that wastewater treatedaccording to this standard cannot meet the carrying capacity and ecologicalfunction requirements of qu river, so it voluntarily adopted a higher effluent standard.on december 22, 2016, when guangan second wwtp hadalready come into service, the sichuan provincial department of ecology andenvironment published the effluent standards in the min river and tuo riverbasins in sichuan province, requiring wwtps in main drainage basins to raiseeffluent discharge standard from class ia to surface water quality standardclass iv, which is exactly what guangan second wwtpadopts. cwegs correct judgment of regionalenvironmental carrying capacity, and foresight into effluent standard wereaffirmed by the provincial government and relevant experts. 
ansecond wwtp is designed, built and operated by cweg relying on its swift(sustainable water intelligent purification technology) wastewater biologicaltreatment technology containing 15 years of efforts, and independentlydeveloped the fifth generation of patented underground wwtp system. adopting ahigh effluent standard, the wwtp records a short construction period, andsolves the nimby problem. it is an urban ecological positiveasset with the characteristics of eco-friendliness, low land occupation and high resource utilization. the underground wwtp does not use the membrane bioreactor (mbr),but still meets the stringent surface water quality standard class iv. its treatment cost per ton is only about rmb 5,000, and theconstruction only lasted over one year. featuring high quality, low investmentand rapid construction, the project fully demonstrates the value for money of the ppp model.
enterprisesvoluntarily raise standards for two reasons. one is that they have their owntechnical standards. the other is that in the ppp model, annual governmentalassessment forces them to provide long-term premium services, hou feng said.
the ppp reformmarks a change in state governance. to let the market play a decisive role inresource allocation, the government must clarify and limit itsresponsibilities. the ppp model breaks the monopoly of the market andencourages fair competition among various market players. it isresults-oriented and efficiency-oriented, and encourages management throughoutproject period, jiao xiaoping said, to make an analogy, in the traditional public service deliverymodel, the government pays before eating, but now, it eats before payment.
    central wwtp-satellite wwtp modelpromotes poverty alleviation 
    new rural areas are
unforgettable hometowns with lucid waters and lush mountains, and also where people want to stay. sichuan is troubled by a large poverty stricken population, andextremely unbalanced regional development. how to alleviate poverty in theprocess of environmental management is a tough task faced by the cpc sichuanprovincial committee and sichuan provincial peoplesgovernment. 
   yin li, governor of sichuan province,said that sichuan is one of the six provinces with the most arduous povertyalleviation tasks in china. a large poverty stricken population is distributedin large areas, especially in ganzi tibetan autonomous prefecture and liangshanyi autonomous prefecture where many people live in extreme poverty. in such acontext, poverty alleviation and livelihoods improvement become extraordinarilyspecial and arduous. 
   the guang
anproject creates thousands of jobs, hundreds of which will be given to povertystricken people.
   lai xinxing, a post-90s graduate,works at cweg guang
an division. his work isperiodically inspecting and monitoring central wwtp fenghe wwtp, and its satellite wwtps in surrounding villages. this management model ensures thatvillage-level wwtps are managed by high-quality employees, and at the sametime, prompts cweg to build automatic and intelligent wastewater treatmentsystems in villages.
   in the ppp model, the government paysonly when qualified services are provided by the enterprise. this actuallyforces the enterprise to provide premium and stable technologies and servicesthrough technical and management innovation.
   in 2016, cweg donated rmb 3 million toguang
an, supporting its precision poverty alleviation.

china economic weeklyvision center chief photojournalist xiao yi
     hou xiaochun, deputy to thenational people""s congress, secretary of the cpc guang’an municipal committee:
an hasfully put the theory of lucid waters and lushmountains are invaluable assets into practice.
    zhang lujing, china economic weekly,guang
an, sichuan
     in 2014, guang’an, the hometown of deng xiaoping, introduced the clean water action plan, marking the launchof the first cross-watershed water environment management ppp project insichuan. hou xiaochun, secretary of the cpc guanganmunicipal committee, introduced how guangan put theconcept of green development proposed by xi jinping into practice.
     china economic weekly: howdoes guang’an implement the clean water action plan based on the pppmodel?
     hou xiaochun: party secretary ofsichuan wang dongming has indicated,
sichuan shouldadvance ecological civilization, and turn into an ecological shelter in theupper reaches of the yangtze river by 2020.” “we shouldalways put ecological benefits first on the path to green development, leavinglucid waters, lush mountains, blue skies and unpolluted soils for our latergenerations. general secretary xi jinping told us, lucid waters and lush mountains are invaluable assets. as we all know, water is the source of life. in the current contextthat water pollution has become a serious and widespread problem, and ourecosystem is overloaded, lucid waters and lush mountains become scarceresources and a comparative advantage for development. to leave lucid waters,lush mountains, blue skies and unpolluted soils for our later generations, thecore is water management. in 2014, with the attitude of being responsible forhistory and the people, guangan took the lead incarrying out the cross-watershed clean water action plan in sichuan. the municipal party committee and governmentjointly issued the opinions on the comprehensive implementation of clean wateraction plan, and formulated eight sub-plans covering urban-rural wastewatertreatment, industrial pollution prevention, agricultural non-point sourcepollution control, prevention and control of livestock and poultry pollution,prevention and control of aquaculture pollution, endogenous pollution treatmentof rivers and lakes, ecological restoration, and drinking water safetyguarantee.
    with the generous help of the ministryof finance
s china ppp center and sichuan provincialppp center, guangan packaged a number of waterenvironment management projects across the city. cweg competed in the opentendering and won the contract by virtue of its strength, capability and senseof social responsibility.
    china economic weekly: the
clean water action plan has greatly improved the water environment of guangan. has it promoted the economic development of guangan?
    hou xiaochun: guang
an has fully put the theory of lucid waters and lush mountains are invaluable assets into practice. during the 12th five-yearplan period, guangans annual regional gdp growth rate averaged 11.4%, annual growth rateof investment in fixed assets averaged 27.7%, local government generalbudgetary revenues and expenditures grew at an annual rate averaging 19.4% and15.7% respectively, and main economic indicators registered growth rates higherthan national and provincial averages for the fifth consecutive year. theseachievements enable guangan to leave the bottom halfof sichuan in terms of financial strength in one fell swoop. in 2016, guangans regional gdp, investment in fixedassets, total retail sales of consumer goods, local public finance income, andper capita disposable income of farmers ranked 8th, 3rd, 3rd, 2nd, and 5th inthe province. its quality and efficiency of development have improvedsignificantly.
     as the advance of the “clean water action plan, the urban andrural areas of guang""an have undergone profound changes, and all centralizeddrinking water sources above the county level have met relevant standards.
the water quality at where the qu river and jialing river join the yangtzeriver in chongqing maintained at surface water quality standard class ii,ensuring the drinking water safety of over 30 million people in chongqing.
    water management has created huge economic benefits for guang
an. attracted by its healthy natural environment, a number offortune 500 companies, central enterprises, and famous enterprises, such aszhengwei international and everbright group, have set up businesses in guangan. besides, guangan has launched severalindustrial park projects together with shenzhen, beijings zhongguancun and tianjin, which have attracted a large number ofprojects to guangan.
    relying on its ecologicaladvantages, guang’an plansto build a number of rural tourism industry belts. deng xiaopings hometown tourist area has been upgraded to a national 5a touristattraction, and a giant panda wilderness reintroduction training base has beenbuilt in huaying chinas outstanding tourist city, national hygieniccity, and national forest city, guangan has also beenselected as a national civilized city with the third highest score amongprefecture-level cities. guangan has also successfullyheld a number of well-known domestic and international events and large-scaleactivities, such as the guang""an red run international marathon, china (guangan)sichuan-chongqing cooperation demonstration zone & northeastern sichuaneconomic zone investment and trade conference, and low carbon and smart citydevelopment international forum.

china economic weeklyvision center chief photojournalist xiao yi
       wang yihong, deputy to thenational people""s congress, director of the sichuan provincial department offinance:
      promoting high-quality andstandard ppp projects in diverse fields through strict identification andactive support
      zhang lujing, chinaeconomic weekly, chengdu, sichuan
      wang yihong, director ofthe sichuan provincial department of finance, told the reporter that to achievethe goal of “making comprehensive moves to finishbuilding a moderately prosperous society with the restof china, sichuan must improve its public service capability, which iscurrently its weak point. how to raise money? how to use money? according towang yihong, the answer to the first question is legal compliance, and to thesecond is innovation.
      china economic weekly:sichuan is an economically underdeveloped province with a large population. howdid sichuan increase its public service capabilities through the ppp model?
     wang yihong: sichuan is aneconomically large province in western china, but its urbanization rate is lessthan 50%. for a long time to come, we will face a major task of transferringmore than 1 million people from rural areas to urban areas, and lifting nearly3 million rural poor people out of poverty every year. to change the currentsituation with insufficient supply of public services, low level of socialsecurity, imbalanced development, and underdeveloped areas, there is a long wayto go.the ppp model provides more and better public services and goods, promotingpeople’s wellbeing, while creatinginvestment opportunities. its related to both socialconstruction and industrial development, and thus is welcomed by governmentsand needed by investors. the ppp model creates an innovative way to providebetter public services and products, enhancing peoplessense of gain and happiness. 
     as of december 31, 2016, atotal of 849 projects in sichuan had included in the ministry of financenational ppp integrated information platform project library, with a totalinvestment of rmb 918.1 billion. the vast majority of projects are distributedin the fields of infrastructure, public utilities, agriculture, forestry andsocial undertakings, which are closely connected to people’s daily life. at present, completed projects have begun to createhuge social and economic benefits for the government, private participant andthe public. better public goods and services are provided to the public,constantly improving their living standard and wellbeing.
   china economic weekly: financially, how did sichuan reassure private investorsand attract them to sichuan?
   wang yihong: conceptually, in a ppp project, the private participant workswith, not for the government. specifically, we focus on the combination of
strict identification with active support. strictidentification means strengthening projectidentification, to keep fake ppp projects out of the project library, andeliminate disguised financing and illegal lending under the label of ppps, thusensuring the implementation of high-quality and standard ppp projects indiverse fields.“activesupport means providing financial policy support anddirect financial support (such as financing cost subsidies aside from gradedfixed central earmarks) for demonstration ppp projects, stimulating theparticipation of private investors and financial institutions while regulatingtheir financing behavior. in addition, we issued new government bonds, toreasonably meet the funding requirements of non-profit public welfare projects.
    as the financial authorityof sichuan, our department promotes the ppp model to provide better publicservices for the public. based on “twoassessments and one procurement (value for money andgovernment affordability assessments, and fair and just governmentprocurement), we shall maintain a sustainable partnership with the privateparticipant, prevent the government from fiduciary overdraft, and enhanceprivate investors confidence in the governments contractual capacity, and their sense of security for investment.
    according to regulations ofthe ministry of finance, the competent department of a ppp project shall, inaccordance with the budget management requirements, incorporate the government’s cross-year fiscal expenditure responsibilities as stipulated inthe ppp project contract into its medium-term financial plan. the plan shall besubmitted to the finance department for review, and then to the localgovernment for approval, to ensure the governmentscontractual capacity throughout project period.
    last, the government may set up a special ppp government revenue andexpenditure account to reflect its total expenditure on ppp projects, and theportion on operations and maintenance, to realize precision management, andreassure investors at the same time.

china economic weeklyvision center chief photojournalist xiao yi
     jiao xiaoping, director ofthe ministry of finance’s chinappp center:
      unexpected ppp reformachievements in three years
      zhang lujing, chinaeconomic weekly, beijing
     by the end of 2016, theministry of finance national ppp integrated information platform projectlibrary had stored 11,260 projects worth rmb 13.5 trillion, of which 1,351projects worth rmb 2.2 trillion had been launched, indicating a “landing rate of 31.6%. during an interviewwith china economic weekly, jiao xiaoping, director of the ministry of finances china ppp center said that 2017 will be a new start for the pppreform.
     china economic weekly: what achievements has the ppp reform made since itslaunch three years ago?
     jiao xiaoping: in the past three years, the ministry of finance and relevantdepartments have jointly promoted the ppp reform through system construction,institution building and carrying out demonstration projects. so far, a vibrantppp market has taken shape, and the reform results exceed our expectations. theppp model has become an innovative concept, path and model of development. asan important tool that helps the local governments achieve steady growth,promote reforms, readjust industrial structure, improve people
s wellbeing, and prevent risks, it has been widely recognized by theinternational community.
    for governments, the ppp model promotes the transformation of governanceconcepts and models; helps put the concepts of
streamlineadministration and institute decentralization, strengthened supervision, andoptimized services into practice; and accelerates theconstruction of rule of law-based, credible, and service-oriented government.
    for the market, it breaks the monopoly of the market and unleashes marketvitality, forming a ppp market with fair competition for various types ofprivate investors.
    for the public, transparent and standard management throughout the projectperiod provide them with channels and methods to exert their right toparticipate, to supervise, and to speak in the field of public service.
    china economic weekly: what are the main challenges faced by the ppp reform?
    jiao xiaoping: the first challenge is the lack of correct understanding of thesignificance of the reform. some local governments take ppps as a way offinancing, rather than a modern governance concept and method. they should paymore attention to the supply-side structural reform and innovative developmentmodels.
the second challenge is the lack of legal-based and credible governmentmechanisms. for a ppp project, the private participant first funds projectconstruction, and then recoups investment in a set of years. withoutlegal-based and credible government mechanisms, the private investor has noconfidence in a 20-30 year partnership with the government.
    the third challenge is the lack of ppp-related laws, regulations and policieswhich can unify the top-level system design. currently, the existing fiscal,taxation, finance, pricing, and land policies cannot meet the requirements ofthe ppp reform more or less.
    the fourth challenge is that private investors lack the sense of publicresponsibility. ppp projects aim to provide public services. therefore, privateinvestors must abandon the idea of making quick and big money, and must have asense of social responsibility for long-term standardized operations.
    the fifth challenge is a low participation rate of private enterprises.
    the ppp market is in its infancy. it is normal that private enterprises areless active limited by their strength in investment, construction andoperations. however, it is true that there are
glassdoors (invisibly keeping investors out) and revolving doors (confusing investors) thatprevent private enterprises from fair competition.
    the sixth challenge is the lack of supervision. at present, there are stillsome abnormal phenomena in the ppp market. some carry out disguised financingprojects, such as fixed return, debt investment in the name of equityinvestment, and share buy-back projects, under the banner of
ppps. some disguise bt projects as pppprojects by removing private participation in operations, or performanceassessment from projects. this leads to the danger of badmoney drives out good.
next, staying true to itsmission, the ministry of finance will cooperate with other relevant departmentsto deepen the ppp reform in a steady and cautious manner, speed up theconstruction of a unified and standardized ppp market, and improve theflexibility of the public service supply structure so that it can better adaptto changes in demand, so as to meet people’sgrowing demand for a variety of public services, and improve their sense ofgain.

china economic weeklyvision center chief photojournalist xiao yi
      yin li, deputy to thenational people""s congress, governor of sichuan province:
      launching “three main campaigns on pollution in line with the theory of lucidwaters and lush mountains are invaluable assets

     zhang lujing, chinaeconomic weekly, chengdu, sichuan
     after the 18th cpc nationalcongress, sichuan province set “deeplyimplementing the spirit of the cpc 18th national congress and makingcomprehensive moves to finish building a moderately prosperous society with therest of china as its theme of work according to itsown situation.
     2017 is an important year for the implementation of the 13th five-year plan,and the year of deepening the supply-side structural reform.
on the occasion of the two sessions in 2017, china economic weekly interviewedyin li, governor of sichuan province. yin introduced the efforts made bysichuan to achieve
innovative, coordinated, green,open and shared development; to practice the theory of lucid waters and lush mountains are invaluable assets proposed by general secretary xi jinping; and to promote thedevelopment of the yangtze river economic zone on the path towards ecologicalfriendly and green development.
     sichuan: transformationfrom economically large to economically strong province by 2020
     china economic weekly: inthe context that china’s economyis under downward pressure, how did the cpc sichuan provincial committee and sichuanprovincial peoples government ensure sichuans healthy economic and social development, and achieve the goal oftransforming from an economically large to an economically strong province, andfrom a generally affluent to an overall affluent province by 2020?
     yin li: sichuan is a largeprovince in terms of economic scale, population and science & education.the task of becoming an economically strong and overall affluent province isvery arduous. after the 18th cpc national congress, the cpc sichuan provincialcommittee and sichuan provincial people’sgovernment studied and implemented the spirits of general secretary xi jinpings series of important speeches, implemented the central governments decisions and arrangements, and practiced the new developmentconcepts. staying focused on strategic transformation, sichuan has been doingwell in economic and social development.
     in 2016, sichuan
s regional gdp reached rmb 3.268trillion, ranking sixth nationwide. its poverty stricken population and povertyincidence decreased from 7.5 million and 11.5% in 2012 to 2.72 million and 4.3%at the end of 2016. however, sichuans per capitaeconomic indicators are still lower than the national averages, which meanssichuan is still underdeveloped generally. in such a context, the cpc sichuanprovincial committee set the goal of transforming froman economically large to an economically strong province, and from a generallyaffluent to an overall affluent province. currently,the provincial government is taking actions towards achieving the goal.
      our work guideline is: inaccordance with the five-sphere integrated plan and four-pronged comprehensivestrategy, (1) actively adapting to, grasping and taking the lead in the neweconomic normal; (2) always making progress while ensuring stability; (3)implementing the “threedevelopment strategies (multi-point, multi-polardevelopment strategy, industrialization-urbanization interactive, urban-ruralintegrated development strategy, and innovation-driven development strategy)based on the supply-side structural reform; (4) highlighting the comprehensiveinnovation-driven reform no. 1 project, the top priority of povertyalleviation, green development, and revitalization of the real economy; and (5)taking comprehensive measures to achieve steady growth, promote reforms, adjustindustrial structure, improve peoples wellbeing, andprevent risks.
     our main goals include: (1) maintaining an economic growth rate higher than thenational average, with regional gdp increasing at an annual rate above 7%,reaching rmb 4.2 trillion by 2020, more than doubled the figure in 2010;(2)comprehensively improving people""s living standards and quality, with percapita disposable income of residents increasing at an annual rate above 7%, reachingrmb 24,300 by 2020, more than doubled the figure in 2010; and (3) furtherimproving public service systems such as employment, education, culture, socialsecurity and medical care systems. efforts will also be made to extensivelypromote people
s quality and social civilization;achieve remarkable results in ecological construction and environmentalgovernance; and make major breakthroughs in key areas and points.
     sichuan is the largestclean energy production base in china
    china economic weekly:sichuan has abundant hydroelectric resources. what ideas does the provincialgovernment have in developing clean energy?
    yin li: sichuan is the largest clean energy production base in china, withobvious resource advantages. at present, its proven reserves of natural gas are3.09 trillion m3, ranking first in china, and its proven reserves of shale gasare 165 billion m3. in 2016, sichuan’sinstalled hydropower capacity exceeded 70 million kilowatts, accounting formore than one-fifth of the countrys total, rankingfirst in china. its electricity transformed from hydro, solar and wind poweraccounted for 89% of its total electricity.
    during the
13th five-year plan period, sichuan will seize the opportunity of becoming one of thefirst national clean energy demonstration provinces, to speed up thedevelopment of clean energy industry, including building the largesthydroelectric base, a national clean energy equipment manufacturing base, and anational energy delivery hub. on the one hand, sichuan will increase theproportion of electricity consumption, promote the construction of rural powergrids, and increase electricity consumption per capita. on the other hand, itwill expand access to natural gas, orderly and steadily promote the replacementof non-renewable energy with natural gas, increase the consumption proportionof clean energy in the industrial and transportation sectors.
      hydropower will bedeveloped in an eco-friendly and scientific manner.a number of large andmedium hydropower plants will be built in the watersheds of jinsha river,yalong river and dadu river in an orderly manner, and small hydropower plantsare forbidden to be built. by 2020, sichuan’sinstalled hydropower capacity will reach 83 million kilowatts, becoming chinas largest hydropower base, generating 360 billion kwh ofelectricity, of which, 165 billion kwh, or 43% of the total, will betransmitted to other provinces and municipalities like shanghai, jiangsu,zhejiang, chongqing.
     active measures will betaken to promote the construction of natural gas (shale gas) production 2020, a number of national important natural gas production bases in northeastern,central and western sichuan will be built. the output of natural gas (includingshale gas) will reach 42 billion m3, of which, 35 billion m3 is consumed withinsichuan. also, active measures will be taken to propel the exploration and developmentof a number of national key shale gas planning blocks, includingchangning-weiyuan, fushun-yongchuan, and zhaotong block in sichuan (junlian,xuyong, gulin); and to build a shale gas exploration and development test zonein southern sichuan, thus increasing reserves and stable output in 3 to 5 shalegas blocks. by 2020, sichuan’s shalegas production capacity will reach 12 billion m3.
     at present, sichuan hasstarted to prepare the yalong river watershed and jinsha river lower reachestourist and water resource complementary development project plan, for aposition on the list of “13thfive-year plan national multi-energy complementarydevelopment demonstration projects, so as to lay a foundation for the cleanenergy delivery to north china and even the rest of china in the future.
     threemain campaigns on pollution for green development
    china economic weekly:general secretary xi jinping has pointed out, “lucidwaters and lush mountains are invaluable assets. whatmeasures has sichuan taken in implementing the important instructions of thegeneral secretary on ecological civilization, highlighting green development,and accelerating the construction of a beautiful sichuan? how to deal with therelationship between economic development and environmental protection?
    yin li: facilitating ecological civilization and environmental protection isnot only a big movement to promote sustainable economic and social development,but also a practical movement to improve people
swellbeing. sichuan is an important water conservation area for the yangtzeriver and yellow river. it shoulders the important mission of safeguarding thecountrys ecological security. therefore, environmentalprotection is not only related to the development of sichuan, but also the overalldevelopment of china. sichuan has magnificent scenery created by its uniquegeographical conditions and diverse climate types. boasting five world naturalheritages, its home to one of the three major forestareas, one of the five major pastoral areas, the largest animal and plant genebank, and the largest herbal medicine base in china. these ecologicalresources, with enormous economic potential, can be transformed into industrialand development advantages as long as they are effectiv
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