(July 19, 2012) From falling bridges to construction site mudslides, the collateral damage from China’s building spree mounts up, reports Cain Nunns for the Global Post.
Rapid urbanization has prompted infrastructure construction in China on an unprecedented scale. But as more bridges, dams and roads are built, examples of projects that have collapsed or failed have uncovered bungles rooted in endemic corruption among local government officials, helping themselves to funds and subcontracting work to friends and inexperienced firms. Alarmingly, in tandem with the country’s infrastructure building spree, China is taking central planning to a new level of state control – as China’s foreign sector and foreign competition is squeezed out, state-owned companies are rising in favour. Read the Global Post report below. For background reading on China’s new level of state control, see “Nationalizing China“.
By Cain Nunns for the Global Post
TAIPEI, Taiwan — Fourteen bodies have been recovered following a mudslide that ripped through the construction site of the massive Baihetan Dam on June 28. According to Chinese state media, rescue teams are still searching for 26 missing workers and their relatives near the site in southwest Sichuan province.
The mudslide, at what will be the world’s third largest hydro-electric plant upon completion, is the latest in a string of high-profile infrastructure accidents. It comes days after Premier Wen Jiabao announced increased spending on public works to shore up China’s slowing economy.
“Infrastructure is obviously very significant and is going to remain so as China accelerates spending to ensure it maintains good economic growth to offset slowing exports,” said Gerald Ollivier, senior transport specialist at the World Bank’s office in Beijing. “[R]apid urbanization, which is likely to continue for the next 20-30 years, will mean investments in all types of infrastructure.”
The National Bureau of Statistics said last week that GDP grew by 7.6 percent in the second quarter, the sixth straight quarter of slowing growth. It was also the first time since the height of the global financial crisis in 2009 that growth had failed to top 8 percent.
The last time that happened, Beijing responded by unleashing a $586 billion stimulus package, much of it targeting infrastructure purchases.
The Ministry of Finance said earlier this month that in June, fiscal spending rose to 17.7 percent of GDP, or $199.3 billion, up from 10.8 percent a month earlier.
According to the ministry, transportation spending soared 44.1 percent year-on-year as China looks to create jobs while integrating an estimated 30 million migrants moving from rural areas into the cities each year.
China’s infrastructure building spree is unprecedented. The World Bank estimates that the country spends about 9 percent of GDP on thousands of projects as it transforms into an industrial superpower. By comparison, Europe and the US spend about 5 percent and 2.4 percent, respectively.
The only comparable effort in modern history is US road-building in the late ‘50s. Those projects propelled US industrial superiority, a roadmap that China is following today, albeit with more advanced technology.
But China has a long history of building big. The Great Wall took centuries to complete and required millions of workers and slaves to get the job done. The Communist Party, China’s new ruling dynasty, is top-heavy in engineers and technocrats who see the economic and nationalistic advantages of multibillion dollar efforts such as the Three Gorges dam and the South-North Water Transfer projects.
The 90th anniversary of the Party in 2011 coincided with the opening of the world’s longest sea bridge, the world’s longest gas pipeline, and the much-touted high-speed railway from Shanghai to Beijing.
Beijing had already announced 23 new major infrastructure projects, costing $100 billion this year — before it decided on the new round of road, rail, ports, power, telecoms and water spending.
But more and bigger doesn’t necessarily mean better. There have been problems.
Collapsing bridges, roads, dikes and dams, particularly in rural areas, have been well-publicized embarrassments for the technocrats in Beijing. Many of these failures are rooted in endemic corruption among local officials, who siphon off cash and subcontract work to friends or inexperienced firms.
According to CNN, four bridges collapsed in 2011 in the span of a week. At one of the bridges, in Chongqing, a major city near the site of the mudslide, 40 people fell 460 to their deaths; later, an investigation uncovered kickbacks and theft. Some of the money was reportedly used to build a hostess bar.
In one of the worst cases, two officials in Jiangxi province were given prison terms following a bridge collapse that injured 12 people. The officials had awarded the bid to a blind contractor.
But it was last year’s high-speed rail crash near eastern Wenzhou — in which 40 people died and 177 were injured — that prompted the most media criticism about China’s infrastructure.
“There has been a lot of emphasis on one major and tragic accident. It has been turned into a way to say the entire program is faulty. It’s certainly tragic that 40 people lost their lives, but every day you have 200 people who die on Chinese roads,” said the World Bank’s Ollivier.
“If you think about the about 400 million people who will travel on the [high-speed rail] this year, it’s actually a pretty remarkable feat. I see any mistake made in China as something that gets amplified and turned into ‘oh the system doesn’t work.’ But it is one of the safest modes of transportation in China. It’s actually a very safe system.”
Read the original article here.