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Time to Board China's Infrastructure Train

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FarCenter Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-07-09 10:54 AM
Original message
Time to Board China's Infrastructure Train
WHILE THE U.S. AND EUROPE SCRAMBLE to bail out their banks, China has a different approach to stimulus.

Unlike New York or London banks, China's largely isolated lenders aren't in dire straits. But faced with slowing exports and rising unemployment, Beijing last November moved to inject both confidence and cash into its flagging economy -- at least 4 trillion yuan ($585 billion; one yuan is worth around U.S. 15 cents) during 2009 -- with a promise to dip further into the country's $2 trillion in foreign reserves if necessary in the future.

<snip>

The key words here are "infrastructure investment." From China's stimulus package, 600 billion yuan will be pumped into new rail services this year, 70% of it earmarked for high-speed passenger lines. That's almost double the 330-billion-yuan 2008 budget for rail, and solid jumping off place for 2010's 700 billion yuan. Around 250 Chinese cities are planning to build new subway lines by 2015; the city of Changshang in central China alone is investing 22.4 billion yuan in two new subway lines.

And this is just the start. As Andy Rothman, China macro strategist at brokerage CLSA in Shanghai, notes: "This is a political exercise as much as anything, and there are no constraints, so can spend as much money as possible to get the economy going again." If nothing else, the package has helped boost the Shanghai Composite, an index of all mainland-listed stocks, by 14% on the year to March 3.

<snip> http://online.barrons.com/article/SB123638324852357879....


Emphasis added.
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msongs Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-07-09 11:02 AM
Response to Original message
1. umm the KEY words are "...the country's $2 trillion in foreign reserves..." + no republicans nt
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Occam Bandage Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-07-09 11:26 AM
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2. So they're spending about eighty billion dollars on rail.
Which kind of makes sense, since most of China's inland cities have terrible transit systems. I mean, take Changsha, which you've added emphasis to (I assume they mean Changsha; there is no city called Changshang as far as I can tell). Changsha has an urban population of six million, or twice what Chicago has. Changsha is investing just over three billion dollars in construction of two subway lines. That is approximately what CTA has budgeted for its next four years of repairs and construction.

It's good that China is investing in its infrastructure, but keep in mind that China has atrocious-to-nonexistent infrastructure outside its glittering coastal showcases, that they have a financial reserve they can use, that their labor and materials are much cheaper, and that there are no opposition parties or elections at any meaningful level.
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eleny Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-07-09 11:33 AM
Response to Reply #2
4. Have you read "Riding the Iron Rooster" by Paul Theroux
It's an intimate glimpse into rail travel over a good patch of China albeit from back in the 1980s.

I wonder if the gov't will put a stop to all the spitting that goes on in trains in China? Seems like that's one glaring memory from the book.
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Occam Bandage Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-07-09 11:35 AM
Response to Reply #4
5. That is still a very real problem, yes. Not quite as much inside trains, thank God,
but everywhere else, certainly. There are signs all over China telling people not to spit.
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eleny Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-07-09 11:29 AM
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3. China to have world's fastest train by 2012
http://news.xinhuanet.com/english/2009-03/06/content_10...

BEIJING, March 6 (Xinhua) -- Trains on the Beijing-Shanghai high-speed railroad under construction will run at 350 km per hour, the fastest in the world, said Li Heping, a researcher at the China Academy of Railway Sciences on Friday.

The 1,318-km-long railway line, with a designed speed of 350 kilometers per hour, will beat the fastest rails in the world at present, which has a designed speed of 320 kilometers per hour, he said.

Trains will take less than five hours to make the run from the capital to Shanghai, which is now at least 11 hours.
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Tierra_y_Libertad Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-07-09 11:47 AM
Response to Original message
6. The irony is overwhelming.
They're using the money they made selling us their products to build their infrastructure. (Not to mention all the oil rights, mineral rights, they're buying at rock bottom prices around the world right now). And, they're loaning us money from the same source just to keep our economy afloat.

In the meantime, we can't afford to build high-speed trains unless we borrow more money from the Chinese.

"The capitalists will sell us the rope with which we will hang them." V.I. Lenin
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matt819 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-07-09 01:51 PM
Response to Original message
7. Instead. . .
We're fucking around here letting states repave a road here or there or build an interchange. There is no underlying principle or program. Here's the money, go spend. Great as far as it goes, but I doubt any of this money will go to mass transit or any sort of coordinated effort.
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Lydia Leftcoast Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-07-09 02:26 PM
Response to Original message
8. It's not just China
Japan is still expanding its network of Shinkansen "bullet" trains, and Taiwan and Korea, relatively small countries, are building high-speed rail links among their major cities. I heard some place that Thailand is investing in rail, too.
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