"Private sector investors want low risk and high return. But many Chinese municipal governments are used to borrowing from local banks with low interest rates."

There is potential for the UK's government and private experts in the country to help Chinese municipal governments understand the expectations of private sector investors through drawing on their own experience.

"There is a lot of interest from international investors in China's public sector projects, and these investments could be achieved if China's investment environment improves," Pape said.