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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."
It's easy for us in the US to decry China building massive projects, when we already have our transcontinental rail, interstate highways, panama canal, etc. which would require so much 'environmental review' today, (just look at the difficulty of building modern nuclear power plants.)
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."
You said it as a joke, but China's debt isn't small. They buy US treasury bonds, but issue their own bonds to pay for them. So yes, in fact, the Chinese government is borrowing from the Chinese people.
"First they came for the slanderers and i said nothing."
In contrast in America, republican hopeful Governor Chris Christie refused to allow a new tunnel to be built linking New Jersey and New York.
They certainly do from Australia. Australia took a huge economic hit when China slowed orders of metal. Sure, they don't buy Ford or GM, but they do buy from abroad.
Learn to love Alaska
Are you thinking of the New South China Mall? According to Wikipedia, "Unlike other "dead malls", which have been characterized by the departure of tenants, the New South China Mall has been 99% vacant since its 2005 opening as very few merchants have ever signed up."
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?
By definition, communism is government control of productive capacity - the ability to create anything.
It means worker control of productive capacity.
Further, there is no one in a position to seriously question the government.
This is definitely not true, sometimes it happens in communism, but it doesn't need to be (and shouldn't be, freedom of speech is extremely important).
"First they came for the slanderers and i said nothing."
>. 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?
(See any communist country in all of history for confirmation.).
There has never been one. Even the soviet union was merely socialist (and they never claimed to be communist).
"First they came for the slanderers and i said nothing."
By definition, communism is government control of productive capacity
Are people this uninformed? by definition communism does not have a government. As others have pointed out, there has never been a communist nation state, just socialist and socialism comes in many varieties form authoritarian to libertarian, government ownership to things like co-ops and credit unions.
The problem is the huge amount of successful propaganda that has been used on the people of America and that it has leaked to the rest of the world. Propaganda like Obama empowering the insurance industry even more by implementing a right wing medical system is socialist or communist.
https://en.wikipedia.org/wiki/Inverted_totalitarianism
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.
Some economists worry that China might eventually be mired in enormous debt
While any country can over stretch itself and find itself mired in unsustainable debt, it is hard not to roll one's eyes when one reads the report's really, really, really, remote scenarios for how China could get itself into such a situation. Given the current global geo-economic reality, spending as much time as the report does on the likelihood of this scenario coming to pass almost discredits the rest of what is actually a great report.
Chinese foreign reserves are almost US$4 trillion (as at September 2014) - more than the combined total foreign reserves held by the next 7 largest holders of foreign reserves (i.e.Japan, Saudi Arabia, Switzerland, Taiwan, Russia, Brazil and Republic of Korea). The United States foreign reserves, by comparison, are a paltry US$134 billion
At the other end of the scale, United States foreign debt stands at a staggering US$18 trillion - about US1 trillion of that borrowed from the Chinese - more than that of the United Kingdom and Germany combined.
The report then nonchalantly skims over the distinction between the mega-, giga-, tera- projects around the world and lumps them together as if they all pose the same systemic risks to each respective economy. This may serve the purpose of highlighting the manic pace of development taking place in China, but the author's US corollary to China's mega airports, rail infrastructure, city expansion, ports, malls, urban housing (albeit many of which still lie empty), are what I would call vanity mega-projects, such as the Joint Strike Fighter aircraft program, the International Space Station, etc.
If I were worried about a major global economy (and the US and China now the two largest economies in the world, by a long shot) "eventually being mired in enormous debt", it would be the one that is spending trillions of dollars on projects that cannot be used to further grow the country's economy in future. Spending billions on improving the county's economic efficiency (such as rail infrastructure, ports, airports, housing for migrant workers, renewable energy, manufacturing, education, etc.) cannot be equated to spending billions on improving the efficiency with which one can obliterate one's adversaries from the sky.
What you are describing is some caricature of socialism.
One of the primary concerns of Marx was that while in the past the workers owned tools of their trade (such as the drill you mention), industrialization changed that dynamic (why would your neighbour buy a table from you when he could buy one from factory for half the prize... and the profits go to the person who owns the factory while pre-unionization workers toil without ever earning enought to buy one of those increasingly expensive factory machines). Marx thus called for a system where society (Note: I do not use the word "government" for a reason) owns the means of (mass) production.
So your "In pure communism you wouldn't be allowed to own a drill" example is quite silly when Marx effectively said "The problem with capitalism is that we are going towards a society where you can no longer provide yourself with the tools you own" (something that you call "a private business" which supposedly "wouldn't be allowed").
I'm not defending communism, I've moved quite a bit right from my leftist youth, but I really think that you have a very poor understanding of the main concepts you are talking about.
WTH are you talking about. San marino isn't communist - nowhere near.
In a capitalist system, businesses are owned by private investors (in modern times, mostly people saving for retirement), and those private owners therefore get any profit the business produces.
In a communist system, the collective (government) owns the businesses and therefore gets any profit made by an enterprise.
Capitalist: private owners get the profit.
Communist: government is the owner, gets the profit.
All real-world countries fall somewhere in the middle of the spectrum. In the United States, for example, private investors are nominally the owners, but the government takes 39% of the profit, then takes 15% the remainder when it's distributed to the owners. In San Marino, the government takes 17% of the profit.
United States: government has 39% stake, private owners have 61%
San Marino: Government has 17%, private owners have 83%
The United States can therefore be said to be "twice as communist" as San Marino.