Municipal asset management in China’s small cities and towns: Findings and strategies ahead

Alessandra Camparano; Joanna Masic

doi:10.24294/jipd.v2i1.161

Municipal asset management in China’s small cities and towns: Findings and strategies ahead

Alessandra Camparano, Joanna Masic

Article ID: 161
Vol 2, Issue 1, 2018

VIEWS - 1852 (Abstract) 617 (PDF)

Abstract

Chinese municipalities have developed a large stock of capital assets during a period of rapid growth and urbanization, but have yet to modernize asset management practices. Cities face challenges such as premature decline of fixed assets and spiking liabilities related to operating and maintaining assets. This paper evaluates the asset management practices in three selected small cities and towns in China, using a benchmarking assessment tool followed by an in-depth field assessment. The paper finds that overall performance is below half the international benchmark for good practice in all three cities. Management practices are considerably more advanced for land than for buildings and infrastructure. Key deficiencies in data availability and reporting, governance, capacity, and financial management indicate increased risks for local government finance and the delivery of public services. For small cities and towns where public revenues are often uncertain and limited, urban public services will be at risk of deterioration unless good asset management practices are put in place. The paper recommends strategic actions for upper and lower levels of government, to advance local asset management practices and facilitate the reform agenda.

Keywords

Asset management; municipal assets; small cities and towns; China; benchmarking assessment

Full Text:

PDF

References

Audit Commission (2000). Hot property: Getting the best from local authority assets. Oxen, UK: Audit Commission Publications.

Biagi M (2014). “Information management strategies for structural integrity. A Bentley white paper”. Exton, Pennsylvania, USA: Bentley Systems, Inc.

Browder GJ (2007). Stepping up: Improving the performance of China’s urban water utilities. Washington, DC, USA: World Bank. doi: 10.1596/978-0-8213-7331-6.

Butler AW, Fauver L and Mortal S (2009). “Corruption, political connections, and municipal finance”. The Review of Financial Studies, 22(7): 2873–2905. doi: 10.1093/rfs/hhp010.

Cendrowski S (2015). China’s local government get a new bailout. Fortune magazine, March 10.

China Ministry of Finance (MoF) (2014). [Mandarin] Strengthening government financial reporting reform towards accrual-based reporting system. Beijing, China: MoF

The Chartered Institute of Public Finance and Accountancy (CIPFA) Property (2012). Building confidence in changing times. London, UK: CIPFA Property

City of Portland (2009). Citywide assets report December 2009. Portland, OR, USA: Portland Bureau of Planning and Sustainability.

____ (2014). 2014 Citywide assets report: Status and best practices. Portland, OR, USA: Portland Bureau of Planning and Sustainability.

Department for Communities and Local Government (2008). Building on strong foundations. A framework for local authority asset management. London, UK: Department for Communities and Local Government.

Dow P, Gillies I, Nichols G and Polen S (2006). “New Zealand: State Real Property Asset Management”. In: Kaganova O and McKellar J (eds.). Managing government property assets: International experiences. Washington, DC, USA: The Urban Institute Press.

Hsing Y (2010). The great urban transformation: politics of land and property in China. Oxford, UK: Oxford University Press. doi: 10.1093/acprof:oso/9780199568048.001.0001.

Institute of Asset Management (2014). Asset management—An anatomy. Issue 2. London, UK: Institute of Asset Management.

Institute for Water Resources (2013). “Best practices in asset management”. Report 2013-R-08. Alexandria, VA, USA: US Army Corps of Engineers.

Jamer M (2015). “Infrastructure asset management: Can the Canadian municipal experience help inform better practices in Southeast Asia?” The Governance Brief. Issue 21. Manila: the Philippines: Asian Development Bank.

Jones K and White AD (2008). RICS public sector asset management guidelines. A guide to best practice. London, UK: Royal Institution of Chartered Surveyors.

Kaganova O (2011). Guidebook on capital investment planning for local governments. Urban Development Series, Knowledge Papers No. 13. Washington, DC, USA: World Bank.

____ 2013. Guidebook on capital investing planning for local governments. Urban Development Series, Knowledge Papers No. 13. Washington, DC, USA: World Bank. Reprinted in Chinese.

Kaganova O, McKellar J and Peterson G (2006). “Introduction”. In: Kaganova O and McKellar J (eds.). Managing government property assets: International experiences. Washington, DC, USA: The Urban Institute Press.

Kaganova O and McKellar J (2006). “Conclusion: Sharing experience—What we do and do not know”. In: Kaganova O and McKellar J (eds.). Managing government property assets: International experiences. Washington, DC, USA: The Urban Institute Press.

Kaganova O and Kopanyi M (2014). “Managing local assets”. In: Farvacque-Vitkovic C and Kopanyi M (eds.). Municipal finances: A handbook for local governments. Washington, DC, USA: World Bank. doi: 10.1596/978-0-8213-9830-2_ch6.

Kaganova O and Windolph G (2012). Introducing management of capital assets in secondary cities in China. Laibin inception report: Initial diagnostic and recommendations. Background note prepared for the World Bank.

Laris M (2011). “New program encourages.” The Washington Post. June 4, 2011.

Lufkin P, Abate D, Miller J, et al. (2010). The Whitestone facility maintenance and repair cost reference 2010–2011, 15th Annual Edition. Santa Barbara, CA, USA: Whitestone Research.

Lu Y and Sun T (2013). Local government financing platforms in China: A fortune or misfortune? Washington, DC, USA: International Monetary Fund.

McKellar J (2006). “Alternative delivery models: The special purpose corporation in Canada.” In: Kaganova O and McKellar J (eds.). Managing government property assets: International experiences. Washington, DC, USA: The Urban Institute Press.

McKinsey Global Institute (2013). Infrastructure productivity: How to save $1 trillion a year. McKinsey Global Institute.

Ministry of Urban Development and Construction (2011). Capital investment planning guide for Ethiopian cities. Addis Ababa, Ethiopia: Ministry of Urban Development and Construction.

National Opinion Research Center (NORC) (2013). “Municipal asset management: Estimating operation and maintenance costs of municipal infrastructure”. Technical Guidelines. Chicago, IL, USA: University of Chicago.

Peterson GE (2008). Unlocking land values to finance urban infrastructure. Washington, DC, USA: World Bank. doi: 10.1596/978-0-8213-7709-3.

Salvetti M and Canneva G (2014). “Water sector regulation in France: A complex multi-model and multi-level regulatory framework”. Florence, Italy: Florence School of Regulation, European University Institute.

Suzuki H, Dastur A, Moffatt S, et al. (2010). Eco2 cities: Ecological cities as economic cities. Washington, DC, USA: World Bank. doi: 10.1596/978-0-8213-8046-8.

Towers F (2013). “Benchmarking presentation”. Presentation at the Annual General Meeting of Federal-Provincial-Territorial Deputy Heads of Public Works, August 2013. Kingston, ON, Canada: National Executive Forum on Public Property.

World Bank and The People’s Republic of China Development Research Center of the State Council (2014). Urban China: Toward efficient, inclusive, and sustainable urbanization. Washington, DC, USA: World Bank.

DOI: https://doi.org/10.24294/jipd.v2i1.161