Shanwei to get $39b 'smart city' in 10 years

"So Yan's plans to build top universities would certainly be beneficial in creating more technical and nursing professionals for the region."

Such a large investment, however, also carries risk, said Lin, as the institutions would have to be of the highest quality to succeed, and there is still no guarantee of sustained property demand in Shanwei.

A public-private-partnership model has been introduced in China to promote government and private-sector companies cooperation on public sector building projects.

Zhong Duliang from the China Center for Urban Development said Yan's planned investment represented a typical model for PPP.

"The government is now actively encouraging more social investment in infrastructure construction, considering its limited budget and staff," Zhong said.

"It is a trend that we expect to grow in the future."