Biden’s new stimulus plan is all about infrastructure, and China has lessons to share
- For decades, spending on infrastructure has been China’s go-to method to both combat economic slowdowns while supporting long-term development
- Analysts say US president’s plan should prioritise infrastructure projects that support overall economic development, with creation of new jobs being secondary
In a sense, Biden is taking a page out of China’s economic playbook. Beijing has used strong investment in infrastructure to boost economic growth, create jobs and lay the foundation for the country’s overall development in the last four decades.
But when it comes to repairing and building roads, railways and other forms of mass transit, there are distinct differences in how the US and China approach infrastructure spending.
First and foremost, the US cannot copy China’s top-down approach to economic planning and management, which has allowed Beijing to control the coronavirus at home while making and implementing infrastructure spending decisions quickly.
If you don’t control the coronavirus well, and you want to reboot the economy, there’s always the danger of the coronavirus coming back. You’ll basically get hurt again
“China has institutional advantages,” said Professor Liu Yipeng at the University of Reading’s Henley Business School in the UK, referring to the differences in the two political systems when it comes to controlling the spread of the pandemic.
“There’s a real trade-off. If you don’t control the coronavirus well, and you want to reboot the economy, there’s always the danger of the coronavirus coming back. You’ll basically get hurt again.”