Riding China’s infrastructure boom

Conceivably, in future some existing projects in China could even be privatized or handed over to foreign consortia to manage.

Despite past poor experience with foreign investment in certain infrastructure projects in the late 90s and early 2000s, bona fide opportunities are again emerging for foreign project finance expertise in China.

The appetite certainly exists among certain fund managers who, despite the risks with China, are attracted by the range of projects but also the usage numbers of proposed infrastructure which in many case are far more compelling than projects in their own jurisdictions.

In theory there is no reason why, if prudently handled, opportunities could not arise to replicate the success achieved elsewhere in the region.

Australia's Treasurer Joe Hockey has made developing alternative models for future infrastructure investment a focus of the latest Finance Minister's G20 meeting in Sydney. Details are still emerging about what he is proposing and whether it will be genuinely innovative.

What is clear is that that there is a much more receptive audience for alternative models for infrastructure investment not only in Australia but also in China. What is also clear is that better infrastructure financing models hold the key for putting the Chinese economy on a lot more sustainable path.