Bridging the gap

When it comes to building infrastructure, such as bridges, roads, railways and power plants, China easily claims the world's top prize. Each year, the country spends more than $500 billion, or 9 per cent of its GDP, on infrastructure, compared with 5 per cent of GDP in Europe and 2.4 per cent of GDP in the United States. With such massive investments, China has achieved a unique distinction. It may be a low-middle income country with a per capita income that is one-tenth that of the US, but its first-world infrastructure puts America's decrepit bridges and railways to shame.

For the Chinese, who built the world's largest infrastructure projects — the Great Wall and the Grand Canal — more than a millennium ago, nothing is left to chance this time round in terms of maintaining their lead in erecting monuments that convey an unmistakable impression of China's rising economic prowess. To celebrate the 90th birthday of the ruling Communist Party, China opened the world's longest sea bridge, the 42-km Jiaozhou Bay Bridge, and launched the Beijing-Shanghai highspeed railway service, which makes the 1,318-km journey in less than five hours.

There is little doubt that China's infrastructure boom has given the country enormous competitive advantages. Besides being a growth driver itself, infrastructure has strengthened China's supply chains and made it the most attractive place for outsourcing manufacturing. China's perceived strengths derived from its infrastructure are such that, in the economic race between China and India, the conventional wisdom holds that unless India catches up with China in improving its infrastructure, China is going to win.

This may be true. Indeed, India needs better infrastructure to improve the livelihoods of its own people. But it would be a mistake to view China's lead in infrastructure development as a sign of Chinese strength. It would be an even bigger mistake trying to use China's infrastructure as a benchmark of sound economic development or an achievement to emulate.

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