• Thu
  • Jul 10, 2014
  • Updated: 12:38pm
BusinessEconomy
CHINA

China cities infrastructure demand booms

PUBLISHED : Monday, 05 November, 2012, 12:00am
UPDATED : Monday, 05 November, 2012, 3:25am

The demand for urban infrastructure on the mainland is expected to soar in the next few years, despite a flood of investment in new projects as part of the stimulus package following the global financial crisis.

The country's urbanisation would demand a "rapidly increasing" number of infrastructure projects in the coming years, said Li Tie, director of the China Centre for Urban Development under the National Development and Reform Commission (NDRC), the country's top economic planner.

About 690 million people, or 51 per cent of the mainland's population, live in the country's urban areas.

That ratio is expected to rise to more than 60 per cent by 2020 by conservative estimates, which means cities should be able to accommodate an additional 100 million-plus people by then - 14 times Hong Kong's present population - according to Li, who is head of the think tank that advises the NDRC on urban planning policies.

This would call for more housing projects as well as roads, underground rail lines, railways, airports and other transport linking cities, he said.

The mainland has invested heavily in infrastructure in the past few years to drive economic growth, and a large portion of the 4 trillion yuan (HK$4.54 trillion) stimulus package following the 2008 United States loan crisis went into such projects.

But Li said the investments were not enough to satisfy rising demand and that some of the earmarked money was wasted on unproductive projects.

"Many local governments put too much emphasis on aesthetics and short-term solutions, leading to a disproportionate focus on roads, green belts and other projects related to looks [rather than utility]," he said.

"Some cities have upgraded their facilities to the standards in developed countries while ignoring the basics."

The torrential rain this summer, for example, exposed poor sewerage systems.

The heaviest downpour to hit Beijing in almost 60 years flooded large swathes of the city, triggered landslides in its mountainous outskirts and left at least 79 people dead.

A man was drowned in his car under a flooded bridge on the second ring road circling the centre of a city that boasts about its modern infrastructure.

"Underground pipeline systems are severely underdeveloped in many mainland cities as local governments pay more attention to 'face projects' than those safeguarding people's basic needs in the long term," he said.

"Wastage of investment in unnecessary infrastructure projects is widespread, partly because it is not an open market."

Infrastructure companies are mainly owned by the central government or local governments. Earlier this year, the State Council announced that some sectors such as electricity and railways would be opened up to private investors, in a bid to put the economy back on track.

However, Li said it would be hard to break up the monopolies because of the vested interests and also because large-scale lay-offs to improve efficiency would threaten social stability.

He said mainland cities had a lot to learn from Hong Kong in terms of the highly efficient use of land and other resources and a developed services sector that served the needs of the public.

"It's time for city officials on the mainland to think if it's more important to showcase their performance or to satisfy the needs of the residents," he said.

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