October 22, 2004
OZYMANDARINS:
Lies, damn lies and Chinese statistics: China has stunned the world with its economic miracle, reflected in its galloping GDP growth. But its figures are mostly pumped up by ambitious local bureaucrats who cook the books and waste money on infrastructure, making Chinese statistics inscrutable and often unreliable parameters of progress. (Florence Chan, 10/23/04, Asia Times)
Apart from overstatement, the GDP rocket is to a large extent fueled by costly but unproductive window-dressing projects throughout the country. Wang Huaizhong is a case in point. As mayor of Anhui province's Fuyang city, he successfully lobbied for a local airport that was started in 1995 and completed three years later, costing 320 million yuan. Though the airport mostly lies idle but demands substantial maintenance coupled with staff salaries from the Fuyang government, it still helped Wang climb up to the post of vice governor of Anhui. The airport, which recorded only 920 passengers in 2002, has become a financial burden, dragging the local government down into a debt of more than 2 billion yuan, almost five times its revenue. But Wang's Anhui reported an average annual GDP increase of 22%. He was, however, deposed for exaggeration before he was convicted of corruption and executed this month, as an example to ambitious party bureaucrats.Another perfect example of window-dressing would be the airport of Zhuhai city, which cost close to 5 billion yuan. Although its passenger and freight traffic in an entire year is less than what the Hong Kong airport gets in five minutes, it is included into Zhuhai's GDP calculation.
Of course the folks who think that China's infrastructure spending is sensible also think the New Deal ended the Depression. Posted by Orrin Judd at October 22, 2004 12:33 PM
They have been making the kinds of infrastructure spending that look good but don't do much to allow the local economy to develop, much as Latin America did under the caudillos, which led to their debt crisis. This 'edifice complex', done to make the generalissimo look good to the ignorant masses, bankrupted the region.
China needs paved roads and rail lines, not airports.
Posted by: Bart at October 22, 2004 3:56 PMWell, it needs airports, too.
And plumbing etc.
I was talking with a professor the other day who described flying into a city of 8 million people. He said the airport was just a paved strip. Not a hanger in sight.
And the power plant was right in the middle of the city, burning soft coal, with no emissions controls.
In a place like China, almost anyplace you go, infrastructure is needed.
There's a difference, though, between excessive and useless.
Posted by: Harry Eagar at October 22, 2004 5:26 PMThe problem, as Harry notes, isn't that they're building these things, it's that they're spending too much on each project.
Posted by: Michael Herdegen at October 22, 2004 7:36 PMThe issue is that infranstructure development in China is decided by political favoritism, not economic reasons. However, in China's favor is that it is fueled by real economic growth, not the vicissitudes of oil prices. They will survive better when the boom ends, but I don't know by how much.
Much of the interior's infrastructure may not be productive, but the coastal cities will do fine. The question is how much political upheaval that discontinuity will cause.
Posted by: Chris Durnell at October 22, 2004 7:37 PMI have been predicting that eventually, the South, where the money is, will get tired of paying the North, where the guns are; and then China will fall apart.
If the past is any guide, then most of the infrastructure will be destroyed, no matter where it is.
My favorite story about East Asian infrastructure involves the medieval records of Korea, which are the most complete of any country excent England.
Unlike England, where the survival was haphazard, the sophisticated Koreans made everything in triplicate and deposited copies in two remote monasteries, in the expectation that the palace documents would be destroyed in the frequent sacks of the capital.
It worked, sort of. One set survived, but it wasn't one of the ones in the monasteries.
Posted by: Harry Eagar at October 22, 2004 9:34 PMHarry,
The South and the North in China are very, very different. Given the Cantonese I know, I sometimes wonder if they are a 'Lost Tribe' because they are so similar to us.
Is Korean as much of a nightmare to learn as Mandarin?
Posted by: Bart at October 23, 2004 7:29 AMVery different, Bart.
Never tried to learn Mandarin. I did study Korean for a while, until my teacher left the island.
I'm not much of a linguist, but as far as I got, Korean didn't seem extraordinarily confusing.
Posted by: Harry Eagar at October 25, 2004 1:10 AM