Posts Tagged ‘China’

China and the West: The Infrastructure Angle

February 16, 2010

After too long an absense I am back!  I wanted to post on a topic of increasing interest to me: how many emerging countries are using infrastructure as a tool to fast track their development and march up into the leagues of economic power, the best example of this clearly being China.  I am currently reading a book by Thomas Campanella entitled The Concrete Dragon that documents China’s dramatic transformation since it opened to the world in 1978.  The scale of this transformation can scarcely be imagined and the author’s thesis is that this is best seen in the impact on China’s cities, which Campanella describes aptly as “the urbanism of ambition”.  China has created cities from near scratch in places like the Pearl River delta (Guangzhou and Shenzen) that have literally gone from rice paddies 30 years ago to multi-million population metropolises housing some of the most high-tech manufacturing companies in the world (he cites Foxconn, a Taiwanese-owned company that employs 200,000 people in the region and manufactures the iPhone and MacBook among many other things).  He also describes the remaking of Shanghai and Beijing as the Chinese government has sought to creative leading global metropolises out of sleepy communist outposts in one generation (and in this, he opines, with some caveats, they are succeeding).  Worthy reading for infrastructure geeks like myself.

My interest in China stems from the constrast with the West, and in particular North America/Canada which has more to do with our national psyches than with available resources, as we are so often led to believe by our political leadership.  In fact the latter argument is absurd, as James Fallows describes in his excellent article on America’s supposed decline in last month’s Atlantic Monthly.  Our parents generation built far more with much less, and China, with a per capita GDP that is a fraction of the West’s is doing today.  The need to focus on infrastructure is obvious as a potential transformative tool to hoist us out of our economic rut, and our inability to do so out of a seeming fear of offending myriad vested interests with their hands in the government trough is a cause of great concern.  I will be weighing in on this issue more with some specific case studies over the next while, but think it is appropos that today the federal government announced new rules on obtaining CHMC insurance for home buying to try and calm a market nearing hysteria.  I think the lesson of this recession for governments is that unfettered private investment alone may not be the cure all that leads us back to sustainable growth, but instead will merely beget the same mistakes over and over again.  It’s the things that the private sector cannot deliver, the public physical and human capital that will get back on the the road to long term sustainable growth.  The bureaucrats in Beijing get that – why don’t we?