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Will there be a wave of work stoppage and default when banks tighten PPP credit?
Zhu Zhenxin, director of Minsheng Securities PPP Research Center, said that banks are now more cautious about PPP and tighten PPP credit, mainly in two aspects: First, the approval of PPP projects that have not yet been released during the approval process is suspended; The second is to suspend lending for PPP that has already landed and conduct risk investigation.

The impact on the first type of project is temporary, and it will be restarted after the PPP project is reviewed in March 20 18; The impact on the second category of projects is hard to say for the time being, depending on whether the landed projects can stand the test, and if they are legal and compliant, they will not be affected; If there are defects, the government, social capital and banks are likely to negotiate rectification and remedy, and try to continue to do so. After all, the cost of suspension is very high. If it is really impossible to reach an agreement, the PPP project may stop working, but it is unlikely that there will be a large-scale default. After all, the government, social capital and banks do not want to see this situation.

Chen Min pointed out that this kind of worry is unnecessary. If the project itself is legal and compliant, the income is considerable, the risks are controllable, and the credit enhancement measures are in place, there should be no problem in the later loan financing of PPP. Chen Min suggested that the current credit policy for PPP projects is more standardized and strict, and higher requirements are put forward for the transaction structure design and procedural compliance of PPP projects. In the future, both local governments and social capital need to be more cautious when choosing projects and designing project schemes.