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China's Engineering Mega-Projects Dwarf the Great Wall
HughPickens.com writes:
David Barboza has an interesting article in the NYT about China's engineering megaprojects. For example, there's the world's longest underwater tunnel, which will run twice the length of the one under the English Channel, and bore deep into one of Asia's active earthquake zones, creating a rail link between two northern port cities, Dalian and Yantai. Throughout China, equally ambitious projects with multibillion-dollar price tags are already underway. The world's largest bridge. The biggest airport. The longest gas pipeline. Such enormous infrastructure projects are a Chinese tradition. From the Great Wall to the Grand Canal and the Three Gorges Dam, this nation for centuries has used colossal public-works projects to showcase its engineering prowess and project its economic might.
In November, for example, the powerful National Development and Reform Commission approved plans to spend nearly $115 billion on 21 supersize infrastructure projects, including new airports and high-speed rail lines. "Clearly, China's cost advantages are going to shrink somewhat over the longer-term and prices for projects are only going to rise," says Victor Chuan Chen. "I think the government has done an admirable job in getting many of these projects off the ground while the economics were still very favorable." China is pushing the boundaries of infrastructure-building, with ever bolder proposals. The Dalian tunnel looks small compared with the latest idea to build an "international railway" that would link China to the United States by burrowing under the Bering Strait and creating a tunnel between Russia and Alaska.
But whether China really needs this much big infrastructure — or can even afford it — is a contentious issue. Some economists worry that China might eventually be mired in enormous debt (PDF) and many experts say such projects also exact a heavy toll on local communities and the environment, as builders displace people, clear forests, reroute rivers and erect dams. "It makes sense to accelerate infrastructure spending during a downturn, when capital and labor are underemployed," says David Dollar. But "if the growth rate is propped up through building unnecessary infrastructure, eventually there could be a sharp slowdown that reveals that the infrastructure was really not needed at all."
In November, for example, the powerful National Development and Reform Commission approved plans to spend nearly $115 billion on 21 supersize infrastructure projects, including new airports and high-speed rail lines. "Clearly, China's cost advantages are going to shrink somewhat over the longer-term and prices for projects are only going to rise," says Victor Chuan Chen. "I think the government has done an admirable job in getting many of these projects off the ground while the economics were still very favorable." China is pushing the boundaries of infrastructure-building, with ever bolder proposals. The Dalian tunnel looks small compared with the latest idea to build an "international railway" that would link China to the United States by burrowing under the Bering Strait and creating a tunnel between Russia and Alaska.
But whether China really needs this much big infrastructure — or can even afford it — is a contentious issue. Some economists worry that China might eventually be mired in enormous debt (PDF) and many experts say such projects also exact a heavy toll on local communities and the environment, as builders displace people, clear forests, reroute rivers and erect dams. "It makes sense to accelerate infrastructure spending during a downturn, when capital and labor are underemployed," says David Dollar. But "if the growth rate is propped up through building unnecessary infrastructure, eventually there could be a sharp slowdown that reveals that the infrastructure was really not needed at all."
China might go into 'enormous debt' to build things? Every other country has already gone into 'enormous debt,' why shouldn't they take advantage of the opportunity while they still can? Get while the getting is good.
At least they'll have something built to show for it, unlike spending that money to bail out banks (and if anyone wants to protest that the banks paid back TARP, I'm well aware of that, and also aware they got their government money through other channels).
"First they came for the slanderers and i said nothing."
For those of you who have not been to China, what China does in terms of infrastructure projects is quite laudable. For a population of that size and country of that size, they need such projects for faster development. In the US, we are more interested in political scoring than building infrastructure or other developmental projects. Is it a sign of decay for us?
Had a Chinese friend that said the exact same thing. On that note, another friend explained to me why civil unrest in China is not going to happen any time soon.
The people love their government. Every year the quality of life for the average Chinese increases significantly. As long as this continues there will be no unrest. Say something bad about the Chinese government and the older generation will actually get mad.
The newest generation is different. They have not been without and have much higher expectations of their government. When this generation constitutes the majority and the older generation has died out you will have the potential for civil unrest.
In time China will become more like the Western world. And there is nothing wrong with taking some time. Force Democracy on a populous that is not ready for it and the results are not pretty.
>. Civil rights are orthogonal to the economic system. You can have civil rights in a communist country. You can have private property. You just can't have private ownership of the production facilities
You can have private property, you say. Can an individual own a cordless drill? Well, a cordless drill can be used to produce a table, so it's a means of production. In pure communism, that wouldn't be allowed.
Suppose I own a drill, and enjoy making tables. My neighbor enjoys working on cars. Can he buy one of the tables I made? No, that would be a private business. Can he help me work on my car, and I give him a table. We'd both be exchanging items of value - doing business. I'd be producing tables, and only the government may produce anything. So double no, that would be two private businesses. See where this starts to be incompatible with human rights? But it gets worse:
You're not allowed to make money by building tables, or otherwise using the productive capacity of whatever is around, right, so you must work for the government. Everybody gets a government check, with the amount decided by the government. Given that all jobs are working for the government, guess who decides what job you spend your life doing? That's right, the government. That doesn't tend to produce a booming economy, so people struggle - they are poor. (See any communist country in all of history for confirmation.). What does a father struggling to provide for his kids do when a neighbor offers to buy a table from him, if he'll build it? He builds the damn thing, of course. All up and down the block mothers and fathers are working their illegal side jobs to try to provide something more for their family than the meager existence offered by the government check. The communist government can't have EVERYONE running black market businesses. If everyone is permitted to run their own little business, that's a free market, the opposite of communism. So the government has to crack down on all of these people building tables, fixing cars, and baking bread for their neighbors. When the government feels the need to keep a close eye on what each person is baking in their own kitchen do you see where this is incompatible with freedom and liberty?
China is not a communist country. The members of parlament are all millionaires, the members of the party being the richest people overall. These people are perfectly married with corporations and the army and he police. I'd say China is a prime example of a corporative country. The whole country is led like it was a giant corporation.
Many roads benefit taxpayers whether they use them or not, for example, roads that carry freight, or roads that take the load away from other roads that the taxpayer does use. So while a taxpayer may not be willing to pay in the hopes that somebody else will, the taxpayer still better pay. That is why having a government and tax laws is not necessarily all bad.
When all you have is a hammer, every problem starts to look like a thumb.
Yeah, the article reads as if written out of jealousy.
Infrastructure is a good thing to build, as long as it is necessary. When it will be used, infrastructure is an economic multiplier. The article suggests that China is building far too much infrastructure, and then gives examples of unused infrastructure. But looking at their map (picture in article), they are building mostly subways in megacities (good idea), container terminals (good idea, the Dutch do the same), high speed rail (good idea), canals for irrigation (debatable, but hopefully low maintenance and long lifetime once completed), and a few crazy projects which may eventually flop.
The funny thing is that China does not care if a handful of multi-billion dollar projects fail to deliver, and fail to have an economic payback. As long as the majority of the projects perform, they win.
The Western economies are stuck somewhere between economic conservatism and economic fear. Corporations do not dare to invest this big, because for a corporation this can be a make or break, and that risk is too big. Also, corporations require a 3-5 year economic payback, whereas infrastructure typically has a much longer lifetime, and is only an enabler, causing economic growth, not immediate profit. Western governments do not dare to invest this big, because every dollar spent is analysed and they must win the next elections.
Basically, we cannot do these kinds of projects, because we all fear for our pension and fear that we lose what we have. And we are jealous of the Chinese who can do this, and we talk ourselves to sleep with articles like this that predict that the Chinese got it wrong after all.