China, like other developing countries, faces the challenge of upgrading and expanding its infrastructure facilities so that economic growth will not be jeopardized by infrastructure-related constraints. Exclusive dependence on external funding presents risks, for example if domestic costs are met by incurring foreign currency obligations. Increasingly, governments in emerging market economies are looking to domestic markets to help fund these massive infrastructure requirements. The domestic banking system is often unable to cope with theemand for long-term funds which such projects generate. Capital markets provide an opportunity for raising long term resources and channeling them to such projects. The present report draws on experience from industrialized and developing countries in terms of capital market financing of domestic infrastructure projects, and discusses the applicability of these lessons in the Chinese context. It also describes the strategies these economies have adopted to foster capital market development conducive to infrastructure financing, and discusses the role of the government in supporting theevelopment of such financial markets. Mechanisms for credit enhancement, such as guarantee schemes, and pooling arrangements for infrastructure financing, are also discussed. Finally, the report investigates China's present stage of development with regard to capital market development for infrastructure financing, and comments on how the fledgling domestic market could be strengthened.
Details
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Author
Kumar, Anjali Gray, R. David Hoskote, Mangesh von Klaudy, Stephan Ruster, Jeff
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Document Date
1997/09/30
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Document Type
Publication
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Report Number
WDP377
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Volume No
1
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Total Volume(s)
1
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Country
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Region
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Disclosure Date
2010/07/01
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Doc Name
Mobilizing domestic capital markets for infrastructure financing : international experience and lessons for China
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Keywords
Finance & Private Sector Development;domestic capital market;domestic capital market development;mechanisms for credit enhancement;international capital market;social safety net program;finance and planning;source of financing;bond issue;institutional investor;infrastructure financing;local capital market;credit rating agencies;credit rating agency;commercial bank;mobilizing domestic capital;project financing;
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Citation
Kumar, Anjali Gray, R. David Hoskote, Mangesh von Klaudy, Stephan Ruster, Jeff
Mobilizing domestic capital markets for infrastructure financing : international experience and lessons for China (English). World Bank discussion paper ; no. WDP 377 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/869031468746699245/Mobilizing-domestic-capital-markets-for-infrastructure-financing-international-experience-and-lessons-for-China