[Reader-list] China's race to build roads, railways and airports

[Rana Dasgupta]

Leaves you a little speechless...

R



Rushing on by road, rail and air
Feb 14th 2008 | BEIJING
 From The Economist print edition


China's race to build roads, railways and airports speeds ahead. 
Democracy, says an official, would sacrifice efficiency


“IT'S like approaching the Forbidden City, it's absolutely incredible.” 
The adjective is one that Mouzhan Majidi, chief executive of Foster + 
Partners, liberally attaches to Beijing's new airport terminal, designed 
by his British firm. The world's largest, designed in the gently sinuous 
form of a Chinese dragon, it was planned and built in four years by an 
army of 50,000 workers. “The columns on the outside are red and you see 
them marching for miles and miles,” says Mr Majidi.

A little hyperbole is understandable. The terminal is 3km (1.8 miles) 
long. The floor space is 17% bigger than all the terminals at London's 
Heathrow combined (including about-to-open Terminal Five). Chinese 
officials like the Forbidden City analogy. Just as the towering 
vermilion walls and golden roofs of the imperial palace inspire visitors 
with awe, China wants its golden-roofed terminal to impress those 
arriving for the Olympic games in August. Part of a $3.8 billion 
expansion, which included the opening of a third runway in October, it 
is due to open on February 29th, weeks ahead of schedule.

The new terminal is not merely window-dressing for foreigners. Beijing 
badly needs to expand its handling capacity. In 2002 the airport ranked 
26th in passenger numbers worldwide. Now it is the ninth busiest. 
China's rapid economic growth and equally rapid integration into the 
global economic system is putting huge strains on its infrastructure. 
This has led to a spate of spending on transport. Between 2001 and the 
end of 2005 more was spent on roads, railways and other fixed assets 
than was spent in the previous 50 years. According to the state media, 
investment will see double-digit growth every year for the rest of the 
decade. Between 2006 and 2010, $200 billion is expected to be invested 
in railways alone, four times more than in the previous five years.

Superlatives abound. The world's longest sea-crossing bridge is due to 
open in June: a 36km six-lane highway across Hangzhou Bay (about the 
same length as the undersea portion of the Channel Tunnel linking 
Britain and France). This will halve travel time between two of China's 
busiest ports, Ningbo and Shanghai, to about two hours. Shanghai itself 
is home to the current world-record holder for such a structure, the 
32km Donghai bridge. This was opened less than three years ago to link 
the city with Yangshan port, now being built on two flattened islands. 
Yangshan is intended to be one of the world's biggest deep-water 
facilities when completed at some point after 2010.

 From August the 115km journey from Beijing to Tianjin, its nearest 
port, will be reduced to half an hour with the inauguration of a 
bullet-train link, China's fastest intercity rail service. There are big 
plans for bullet trains. Work began in January on a 1,300km line between 
Beijing and Shanghai that, when completed in five years' time, will 
reduce rail time between the two cities from ten hours to five—and thus 
be a competitive alternative to flying.

At $30 billion, the Beijing-Shanghai high-speed line is the most 
expensive project in China's railway history. But with cash to spare the 
government, which is reportedly shouldering nearly 80% of the cost (with 
a consortium of insurance companies providing much of the rest), is 
pushing ahead after years of debate over what technology to use and how 
much to spend on it. By comparison China's construction of a 
conventional line (but the world's highest railway) from Golmud to the 
Tibetan capital, Lhasa, which was completed in 2006 amid much 
self-congratulation over its technological accomplishment, cost only $4 
billion (or so officials said: infrastructure price tags are subject to 
little scrutiny in China and overruns are rarely reported publicly).

More prosaic but cumulatively no less remarkable projects abound. 
Fifteen years ago intercity travel was often a choice between slow, 
crowded trains or a perilous journey by car or bus on narrow rural roads 
(flying was for the privileged; until 1993 buying a plane ticket 
required a letter of authorisation from an employer). But since the 
1990s China has built an expressway network criss-crossing the country 
that is second only to America's interstate highway system in length 
(see article). By the end of 2007, some 53,600km of toll expressways had 
been built. The pace of construction will now be slowing a bit, but the 
aim is to have 70,000km of expressways by 2020. The Ministry of 
Communications (which is responsible for roads) boasts that China's 
expressway builders achieved in 17 years what the West took 40 to 
accomplish.

Oh for the open road

The expressway network has helped divert some of the freight traffic 
from the overburdened railway system. It has also—to the delight of 
China's burgeoning car industry but to the horror of 
environmentalists—helped to promote a sharp increase in private car 
ownership. The Asian Development Bank (ADB), which financed part of a 
660km expressway linking Beijing with Shenyang in the north-east, found 
that the new toll road was little used after its completion in 2000. 
Now, says an ADB official, traffic flow (and therefore revenue) far 
exceeds initial predictions thanks to the growth of industries near the 
route and the increasing use of private cars for long-distance travel.

It is not just expressways that are getting attention. In 2005 China's 
leadership launched a programme to build what it called a “new socialist 
countryside”. This was an effort to assuage discontent in the 
countryside over the widening gap between rural and urban incomes and 
public services. The programme includes the planned construction of 
300,000km of new rural roads between 2006 and 2010, an increase of 
nearly 50%.

Investment in railways has been far slower to gather pace. In southern 
China the worst snowstorms in decades paralysed much of the network in 
late January and early February. But the rail connections between north 
and south were already inadequate. Much of the south's coal supply is 
sent by rail from northern mines to the coast and then loaded onto 
ships. The World Bank says that China's railways carry 25% of the 
world's railway traffic on just 6% of its track length.

But change is coming. In the past couple of years investment has grown 
considerably. This year's target is $42 billion, compared with a total 
of $72 billion in the preceding five years. World Bank officials call it 
the biggest expansion of railway capacity undertaken by any country 
since the 19th century. China had 78,000km of track at the end of last 
year. The original plan, published in 2004, was to increase this to 
100,000km by 2020. Last October this was revised to 120,000km (and 
officials now say the target will be met by 2015). Even sticking to the 
2020 target, this will mean laying 60% more track in the next dozen 
years than was built since the start of the economic reform programme 30 
years ago. Huang Min, the Ministry of Railways' chief economist, says 
that by 2020 the railway system's freight-handling capacity should be 
greater than demand. At present, he says, it can handle only 40%.

Mr Huang reckons that railway expansion will bring down logistics costs, 
which he says amount to 18% of GDP in China compared with 10% in 
America. It will also help reduce pollution, he says, since fewer 
polluting lorries will be needed.

Aviation facilities will expand rapidly too. The increase in air 
passenger traffic has been dramatic: from 7m passengers in 1985 to over 
185m in 2007. To deal with this rise, the government announced last 
month that it planned to add another 97 airports by 2020 to the 142 
China had at the end of 2006. The number with an annual handling 
capacity of over 30m passengers will grow from three to 13.

There will also be a huge expansion of seaport capacity. The government 
predicts container throughput will increase by 85% between 2010 and 2020.

In all this activity it greatly helps to have a secretive planning 
bureaucracy and a government that brooks little dissent. In Britain, as 
Mr Majidi points out, it took as long to conduct a public inquiry into 
the proposed construction of Heathrow's Terminal Five as it took to 
build Beijing's new airport terminal from scratch.

There was no consultation with the public on the terminal. Nor was there 
any public debate about the construction of Beijing's third runway, 
notwithstanding the noise pollution already suffered by thousands of 
nearby residents. Beijing is now planning a second airport (even with Mr 
Majidi's terminal, the current airport is expected to exceed its 
designed capacity of 60m passengers this year, seven years before 
schedule). The location is being considered in secret. Xu Li, an 
official at the Ministry of Communications' transport research 
institute, agrees that China's infrastructure expansion is not as 
restrained by rules as it is in America. Once a plan is made, it is 
executed. “Democracy”, she says, “sacrifices efficiency.”

An often heavy-handed approach to land appropriation also helps. For 
Beijing's airport expansion, 15 villages were flattened and their more 
than 10,000 residents resettled nearby. But several of the former 
farmers told your correspondent that they were still barred from the 
unemployment benefits and other welfare privileges of city dwellers even 
though their farmland had been grabbed from them. One elderly man said 
that officials had threatened them with violence if they refused to 
leave their villages.

No tree-huggers permitted

Another factor is the hazy definition of who owns rural land (see 
article). Local officials tend to regard it as the government's and 
readily seize it—often for little compensation. In a recent study of 
China's transport, the World Bank says that roads are sometimes built 
expressly for the purpose of converting countryside into 
revenue-generating urban land. This causes a rapid outward expansion of 
cities, which combined with a lack of adequate public transport 
increases dependence on private cars. Beijing's polluted air and 
congested streets, to which 1,000 cars are added daily, are evidence of 
the problem.

Some of China's grand plans for the coming years may encounter a bit 
more resistance. In urban areas a property-owning middle class that 
hardly existed a decade ago is now growing rapidly. Some of its members 
are becoming increasingly vocal in their demands for more open 
decision-making, particularly when it comes to projects that might 
affect property values.

In China's biggest-ever urban protest against a transport-related 
project, thousands of Shanghai residents gathered outside the city 
government's headquarters in January to demand the cancellation of plans 
to extend a Maglev (magnetic levitation) train line through the city's 
main urban area. The existing Maglev line was opened with much fanfare 
in 2003 as the first commercial service of its kind in the world. It 
provides a 30km ride at astonishing speed, peaking at 420kph, from the 
city's Pudong airport to a rather inconvenient spot on the city's 
outskirts. The government wants to link it with the city's other 
airport, Hongqiao. But many residents along the route say they are 
fearful of noise and radiation from the trains.

Many also question whether the Maglev will ever be much more than an 
expensive joy-ride that tourists will take once, just for the thrill of 
it. Shanghai has had a tendency in recent years to spend big money on 
projects of questionable value. The billions of dollars spent on 
Yangshan port and its cross-sea bridge might well have been better 
invested in expanding existing, and far more convenient, deep-water 
facilities in nearby Ningbo. The opening of the Hangzhou Bay bridge this 
year will make Ningbo's port all the more accessible to Shanghai. But 
cities in China have a poor record of co-operating, particularly when 
they belong, as these two do, to different provincial administrations.

Olympic swank

A show-off tendency among Chinese urban planners (as well as a dire lack 
of suburban rail networks) has helped to fuel a rapid expansion of 
costly underground railways. In some cases, says the World Bank, this is 
diverting resources away from urgent needs in the bus systems. Two 
decades ago only two cities, Beijing and Tianjin, had subways (and only 
three lines between them). Now 15 cities are building them at a total 
cost of tens of billions of dollars. Beijing and Shanghai are leading 
the way, spurred on by their desire to impress the world at the Olympic 
games and, in Shanghai's case, the World Expo which it will host in 
2010. Beijing's official Olympics website displays a story saying that 
the city will have the biggest underground network in the world by 2015.

Complaints still abound about the way things work. Highways—both 
expressways and other intercity roads—are studded with traffic-slowing 
toll booths. China reportedly has 70% of the world's tolled roads and 
its tolls are the highest in the world (using exchange rates adjusted 
according to currencies' purchasing power). To cut costs, lorries 
routinely overload. This helps to make the roads among the most 
dangerous in the world (89,000 deaths in 2006 by official reckoning; the 
actual number may be much higher). And it pushes up the cost of 
maintaining them.

The construction of expressways has been speeded up by making the 
provinces shoulder the costs. This they readily do, using toll revenues 
to repay construction loans provided by state-owned banks (the banks 
happily roll over debts that are not repaid on time). But this 
decentralisation makes it difficult for the central government to order 
an end to tolls or impose limits on them. A member of a district 
legislature in Beijing, Li Shuyuan, has been fighting a high-profile 
campaign for an end to tolls on one of the city's expressways which has 
long since repaid its loans. In 2002 she and her supporters won a rare 
victory by getting the city government to persuade the expressway 
operator (which the city owns) to reverse a toll increase. But both the 
government and operator refuse, she says, to budge further.

The railways' problem is that they are still highly centralised and the 
central government is unwilling to shoulder the whole cost of its 
massive expansion programme. The Ministry of Railways is also now 
turning to provincial governments as well as to companies (including 
private ones) and the stock markets for funds. The ministry's Huang Min 
says that railways in the booming east of the country could be run 
“according to market principles”. Investors, he says, will be attracted 
by the huge pent-up demand and “appropriate” increases in freight 
tariffs and passenger fares. Sceptics wonder whether the hidebound 
ministry will give market forces the leeway it says it will. And big 
fare increases would not go down well with passengers whose complaints 
about overcrowded, uncomfortable and corruptly managed train services 
are legion. But talk of reform is getting louder.

Strong political will may have helped what one World Bank adviser calls 
China's “mind-boggling” pace of rail and road construction. But even the 
Communist Party's resolve may not suffice for what would be the most 
jaw-dropping project of all. A plan published by the Ministry of 
Communications in 2004 mentions, off-handedly, an expressway from 
Beijing to Taipei (target completion date: 2030). How the road would 
traverse the 150km Taiwan Strait is not mentioned. Nor does the document 
suggest how to tackle the even bigger problem of reaching agreement with 
Taiwan. But government maps of the completed expressway network show it. 
It would be unwise to rule it out.