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Analysis of political risks and opportunities in public private partnerships (PPP) in China and selected Asian countries: Survey results

Tillmann Sachs (Nanyang Technological University, Singapore Banque AIG, London Branch, UK)
Robert Tiong (Nanyang Technological University, Singapore)
Shou Qing Wang (Department of Construction Management, Tsinghua University, People's Republic of China)

Chinese Management Studies

ISSN: 1750-614X

Article publication date: 24 April 2007

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Abstract

Purpose

The paper aims to provide insight into the opportunities and impact of political risks in China and selected Asian countries on opportunities in infrastructure projects under public‐private partnership (PPP) schemes.

Design/methodology/approach

The impact of political risks on PPPs was investigated through an international survey among senior staff of international lenders, investors, insurers, and legal and financial advisors from the public and private sector. The surveyed political risk categories base on the Multilateral Investment Guarantee Agency Convention and literature review. They comprise six categories: currency inconvertibility and transfer restriction, expropriation, breach of contract, political violence, legal, regulatory and bureaucratic risks, and non‐governmental action risks. The survey evaluation uses fuzzy sets and non‐parametric statistics.

Findings

The findings comprise rankings of political risk factors within China and Asian countries as well as rankings of these countries with respect to the risk categories and rankings of future PPP opportunities over time. Also, survey comments are discussed.

Research limitations/implications

The survey response rate is relatively low with 29 respondents. This is attributed to the specialized nature of the survey questions and topic area. It also indicates that political risks are little understood and paid attention to, though significant in impact. Owing to the chosen evaluation methods for small sample sizes, the results are robust and show high correlations with market data.

Practical implications

The results provide insight into the impact of political risks and the perceived magnitude of each risk category. It supports decision makers prioritizing and analyzing country risks.

Originality/value

The value and originality is in the use of a fuzzy‐coded survey scale to quantify perceptions on single political risk factors across China and Asian countries with focus on PPP infrastructure projects. The paper demonstrated that robust results from small sample sizes can be derived with the employed methods.

Keywords

Citation

Sachs, T., Tiong, R. and Qing Wang, S. (2007), "Analysis of political risks and opportunities in public private partnerships (PPP) in China and selected Asian countries: Survey results", Chinese Management Studies, Vol. 1 No. 2, pp. 126-148. https://doi.org/10.1108/17506140710758026

Publisher

:

Emerald Group Publishing Limited

Copyright © 2007, Emerald Group Publishing Limited

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