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hat lack of funding imowth and innovation. A ng originates from the rmation asymmetry beand SMEs, as well as the cteristics of the Chinese em which the authorities rking to remove. RD governments should blishing a YRD regional d to supporting growth option would be to esonal “YRD Development tribute and administer ract additional sources The use of technology redit evaluation could reduce the cost of serE sector. Because risks , insurers could provide nce to SME customers, undling together propility covers as well to ne-stop-shop for SMEs eds. a significant challenge. It is thus imperative that local governments in the YRD region look to private investment as an alternative source of funding for large-scale infrastructure projects.

The governments of the YRD region have already taken steps toward public-private partnerships through the establishment of the 100 billion yuan (US$14 billion) Yangtze River Delta Collaborative Advantage Fund. However, as financing is dominated by local level state-owned enterprises, private involvement in this scheme remains limited. To facilitate the process and establish a benchmark transaction, a best practice pilot transaction with stakeholders such as the Asian Infrastructure Investment Bank (AIIB) could be set up.

Hurdles need to be removed to better mobilise private sector capital. In particular, the provision of operating data, financial reporting, and disclosure requirements for infrastructure investments need to be standardised to allow infrastructure debt to become more accessible, and ultimately more tradable. Additionally, the Shanghai government could stipulate that all infrastructure projects follow green development principles in order to help achieve China’s sustainable development goals and put Shanghai firmly on the path to becoming a low-carbon city. An investible and tradable infrastructure asset class would be a significant step in facilitating private sector capital flows into infrastructure.