(Yicai Global) Aug. 22 -- China's three ministries, including the ministry of finance, guide and encourage social capital to apply the public-private partnership (PPP) model to pave the way for new opportunities for further development of the pension service.

The ministry of finance, the ministry of civil affairs and the ministry of human resources and social security have jointly published a document that calls for and encourages the application of the public and social capital cooperation to facilitate the supply-side structural reform of the pension service industry and speed up its development. By doing so, a multi-level, multi-channel and diversified pension service market can be built and the development of pension service can be ensured, the ministries opined in the document.

It called for government to let social capital operate and manage the public pension service facilities. The opinions by the three ministries expressed in the document promotes comprehensive development of a new business pattern, "pension service +", to help build a modern service industry, which takes the pension service as its theme, with healthcare, physical fitness, medical treatment, education, entertainment and the internet as associated elements.

Ye Jitao, PPP expert for the National Development and Reform Commission (NDRC) and the ministry of finance and chairman of Honker Consulting, said that the policies mentioned in the document are not only conducive to the PPP development in the pension service industry, but also good for real estate destocking as they can help improve the utilization efficiency of idle assets.

The three ministries also support the combination of medical treatment and pension service, which would delight the social capital that has a strong capability of integrating resources.

The PPP model means resources that the private sector possesses participate in providing public goods and services through cooperation between the public sector and the private sector. This can bring benefits to the private sector, while fulfilling the public sector's functions. This partnership model not only keeps the government's control over the public sector, but also encourages the private sector to invest resources in the public sector, improving the efficiency of public service supply.