Infrastructure (of US and China): Time to Compete to Win

[gpit]

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Infrastructure: Time to Compete to Win - Brookings Institution

July 22, 2008 —
Next month, American athletes will return from the historic Olympic Games in China with medals and a tangible idea of what it means to take infrastructure and the long-term prosperity of a country seriously. When our athletes land in Beijing, they’ll find that the new terminal at Beijing Airport is larger than all of Heathrow Airport, the world’s third busiest. China’s investment in rail infrastructure – almost $200 billion from 2006 to 2010 – is the beginning of the largest expansion of railway capacity undertaken anywhere since the 19th century. And in just the last 15 years, China has built a highway network that rivals what it took America 40 years to build.

These investments reflect an unprecedented shift in the balance of global economic power that is fundamentally altering the contours of how we compete in a global economy. For two generations, the world economy was defined by only seven countries -- Canada, France, Germany, Italy, Japan, the UK and the United States -- which produced two-thirds of world output.

But the last five years have seen the beginning of a dramatic change as major emerging economies, from China to Brazil and India, grow rapidly, aided by governments that make investments for the long-run, like in infrastructure. From 2002 to 2007, the G-7 share of world output fell from 65% to 57% and, according to Brookings scholar Homi Kharas, will likely decline to 37% of world output by 2030. Meanwhile, the major emerging economies’ share of global output jumped from 7% to 11% and is set to hit 32% by 2030, almost catching-up to the G-7.

To remain globally competitive, the U.S. needs to invest for the long-term in infrastructure, among other efforts, as we did under President Roosevelt with rural electrification and under President Eisenhower with the creation of the Interstate Highway System.

Roads, bridges, railroads, airports and ports form the connective tissue of our economy. They allow goods to move rapidly from one part of the country to another -- and from the U.S. to the rest of the world. By reducing the costs of transportation, they make our economy more efficient and our exports more competitive.

For too long, we have been badly neglecting investments in infrastructure. The American Society of Civil Engineers has given our rail systems a C-, our air traffic infrastructure the grade of D+, our roads a D and our navigable waterways a D-. The Congressional Budget Office estimates that infrastructure spending is twenty percent below what would be required to simply stay in place, let alone to begin to repair the damage of years of neglect and move forward.

When time is money, delays associated with weak infrastructure reduce our export competitiveness. Take ports, which process ships that carry over a quarter of U.S. exports by value, and almost three-quarters by weight. Rail infrastructure within port terminals is often antiquated, leading to breakdowns and backups. A shortage of staging area leads to congestion as shippers struggle to maneuver their goods. Inadequate IT systems cause shippers to send cargo to ports that are already at capacity, exacerbating congestion at peak times. And that’s only the delays within the ports. The Government Accountability Office warns that the increasing congestion around ports represents a threat to our ability to move goods for export.

Other countries are leapfrogging past us by investing in world-class ports. China is investing $6.9 billion; the port of Shanghai now has almost as much container capacity as all U.S. ports combined. Singapore, too, with a population of less than five million people, is spending well over $7 billion to increase its container capacity, and as a result, its port will have 30 percent more container capacity than all U.S. ports combined.

The costs of neglecting infrastructure like ports are staggering. Simply by improving our port system to be as efficient as those in China or Singapore -- so that goods spend one day waiting in ports rather than two days – we could increase our exports by over $10 billion a year and support almost 60,000 jobs. Improving transportation infrastructure elsewhere could have similarly large impacts on our export performance.

When our gold medalists return from the Olympics next month, it will be after years of long, patient training and preparation for the global competition that was waiting for them in Beijing. They deserve to come home to a country willing to make the right long-term investments to compete in the global economy as well.

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A little bit old but interesting reading.

[gpit]

Aboard the Beijing Bullet, lessons for Delhi

Reshma Patil, Hindustan Times
Email Author
Beijing, August 03, 2008
First Published: 23:22 IST(3/8/2008)
Last Updated: 01:58 IST(4/8/2008)

In less than two minutes, the Harmony silently glided past the top speed of India’s fastest trains, the Rajdhani and
the Shatabdi.

A week before the most definitive moment in China’s modern history as a rising superpower — the opening of the Olympic Games in Beijing at 8.08 pm on 08.08.08 — I bought a second-class ticket out of the capital. HT’s daily dispatch for the Beijing Olympics began aboard China’s latest and the world’s fastest intercity bullet train that will shuttle football fans between inland Beijing and coastal Tianjin at a record 350 kmph in 30 minutes. By 2013, a high-speed railway will cut train travel between Beijing-Shanghai from 10 hours to five.

I skipped the media test ride, to line up as a common commuter between inland Beijing and China’s third-largest city and its busiest northern seaport about 135 km away. The Made-in-China bullet trains cut the commute from a previous 70 minutes at 200-250 kmph to 30 minutes. The new commute combines Beijing and Tianjin into one city, Chinese researcher Zhou Gansi told China Central Television. “It can dramatically change people’s way of life.”

The local from Mumbai’s southern financial hub to its northern suburbs takes twice as long. Imagine the potential of a Delhi-Chandigarh or Mumbai-Pune train giving professionals the choice of a comfortable daily intercity commute instead of migration. The fastest Mumbai-Pune train takes three hours to cover 192 km.The seven-year infrastructure revolution inside India’s largest and most powerful neighbour goes beyond its 37 Olympic stadiums.

My journey began at Asia’s largest railway station (by one estimate, the size of 20 football fields) that opened in south Beijing last week with none of the fanfare that would accompany such an event if it happened in India.

After all, Beijing opened the world’s biggest international airport terminal this year, to welcome over 10,000 athletes and modern China’s biggest-ever influx of foreigners (about half a million) from August 8-24.

The solar panel-roofed station looks like an international airport, and is bigger than the 91,000-seat Bird’s Nest stadium that will host the opening ceremony. As commuters bought instant noodles they prepared with hot water from the station taps, I was the only Indian in the crowd, struggling to decipher Chinese signs.

First-class tickets at 69 yuan each (Rs 426 approx.) were sold out for day one. I bought a second-class ticket 58 yuan (Rs 358 approx.) and found that the reclining blue seats, footrests and wide shatterproof windows with blinds made the journey more comfortable than flying economy.

Fifteen minutes before my train departed, I queued behind excited Chinese commuters to enter one of the 24 platforms. The sleek white Harmony stood waiting, with attendants in black and purple uniforms who smiled more than the airhostesses aboard Air China.

I sank into the seat and found an English brochure for passenger guidance that said ‘the disabled military stuff can purchase half price ticket’.

A Chinese and English commentary welcomed the 600 passengers, and attendants walked the wide corridor between cabins divided by automatic glass doors to distribute water bottled in Tibet.

I nervously noticed the disposable bag for train sickness, but never needed it. Within three minutes, the train touched 196 kmph. Then it crossed 280 kmph in five minutes, sweeping past factories and highways.

Twelve minutes into the journey, we hurtled ahead without a lurch at 346 kmph. On a test run, the train has peaked at 394 kmph.

As we rolled into Tianjin station, my feet did not wobble. Commuters posed by the train, but I searched for a coffee shop. There was no bench, not even a toilet as the station is still not fully ready.

So I hopped into an empty Harmony by the platform — though my return ticket was for a later train — and pleaded for a quick coffee with milk. While the attendant poured it I checked the airplane-style loo, but a policeman banged on the door and I left the train superfast. Coffee in hand.

Aboard the Beijing Bullet, lessons for Delhi- Hindustan Times

[Contrarian]

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Bullet trains are as yet not feasible in India.