Explainer | What are China’s major infrastructure projects in an economically fraught 2022?
- From large-scale transport and water-conservancy projects to renewable energy efforts, China is splashing out trillions of yuan on critical infrastructure
- Such projects are expected to give China a much-needed economic boost as it struggles to cope with the effects of an often-crippling zero-Covid policy
Turbulent times are seeing Beijing dust off its old playbook that calls for ramping up infrastructure investments across the country, in an industrious bid to offset damage to the world’s second-largest economy by ongoing coronavirus restrictions and a faltering property sector.
Indeed, the pace of infrastructure investment continues to accelerate. Year-over-year growth was 8.6 per cent in the first nine months of 2022, or 0.3 percentage points higher than during the first eight months.
Hundreds of billions of yuan are being spent. But what is all that money going toward?
Water Conservancy
China’s Ministry of Water Resources said that 703.6 billion yuan (US$98 billion) was invested in water-conservancy infrastructure projects during the first eight months of 2022 – an increase of 63.9 per cent over the same period in 2021.
In total, the ministry said that construction had begun on more than 19,000 water-conservancy projects, of which 31 were considered “major” projects.
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China’s ambitious South-North Water Transfer Project – an underground network of water tunnels that relocates water from the Yangtze River to northern China – kicked off construction of a new central line in July.
The new Yinjiangbuhan tunnel will drain water from the Three Gorges Dam to the Han River in a bid to support food production. With a total investment of around 60 billion yuan, the tunnel is expected to be the longest of its kind, once completed.
Another major project under way is the Guangdong-Beibu Gulf Water Resources Allocation Project. With a total investment of around 60 billion yuan, it is set to span more than 500km (310 miles) and will supply water to cities prone to drought in the westernmost areas of Guangdong province.
Earlier this year, work also began on a major floodgate-reconstruction project along the Yellow River. Comprising 37 floodgates between eastern Shandong province and central Henan province, the 2.07-billion-yuan project will improve irrigation in the critically important grain-producing region.
Renewable Energy
According to the China Photovoltaic Industry Association, the nation’s solar capacity expanded by 31 gigawatts in the year’s first half alone – an increase of 137 per cent from the same period in 2021.
In northeastern Liaoning province, construction began on six large-scale renewable energy projects in September 2022 with a total investment of more than 600 billion yuan. Comprising wind, solar and nuclear energy, the project is expected to produce a cumulative 60GW worth of power-generating capacity – more than the total capacity of Vietnam.
Furthermore, He Lifeng, director of China’s top economic planner, the National Development and Reform Commission, said China is planning to build a further 450GW worth of solar and wind capacity in the Gobi Desert and other northern desert regions.
Transportation
In September, the Ministry of Transport revealed that, between January and August, 2.34 trillion yuan was invested in transport-related fixed assets, including new highways and railways. It marked a year-on-year growth of 6.6 per cent.
By the end of August, there were more than 240 newly constructed expressways and highways across the country, comprising around 7,400km of new roads, the ministry said.
One such project was a new 294km expressway along Xinjiang’s border with Qianhai that further connects the Uygur autonomous region with the rest of China’s expressway system. And in western Sichuan province alone, the third quarter saw construction begin on 10 expressway projects comprising 935km of road, which the ministry called a record for the region.
In total, the state-owned group said 25 projects were under way, and these will increase China’s rail length – both normal and high-speed rail – by more than 5,300km. The country aims to have about 200,000km of railway completed by 2035.
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East-West Data Transfer Project
The construction of a new data-processing network, dubbed the “East-West Data Transfer Project”, began this year.
The mega-project will see data – collected from the highly developed urban centres of eastern China – sent to the country’s more resource-rich western regions for processing.
Authorities hope the new project will help develop the digital infrastructure in the west to match that of the east, while further expanding China’s digital economy, according to a report in People’s Daily.
Since 2015, China’s data growth has averaged more than 30 per cent per annum, and the number of data centres grew from 1.24 million in 2015 to 5 million by 2020, according to data from the National Bureau of Statistics.
In the first quarter, 25 construction projects related to data networks had begun across eight regions, including the Greater Bay Area, the Chengdu-Chongqing economic circle, and the Yangtze River Delta. The project is being driven by 190 billion yuan worth of cumulative investment.
The NDRC expects investment in big data centres to grow at an annual rate of more than 20 per cent during China’s 14th five-year plan to 2025, generating a cumulative investment of more than 3 trillion yuan.
Underground Urban-Development Networks
The construction of underground pipeline networks for electricity, water, heat, gas and telecommunications in cities is a major undertaking that China has accelerated this year.
As China’s urbanisation level rises, the construction of underground integrated corridors will bring an annual average investment demand of billions of yuan, according to Dou Yong, the head of the Research Group on Urban Underground Pipe Network Construction at the China Centre for International Economic Exchanges.
The first half of 2022 saw 68 such underground pipeline projects under development, spanning an estimated 285km, according to state media reports citing the Ministry of Housing and Urban-Rural Development.
In late February, China’s southwestern city of Chongqing had completed 164.9km of underground pipelines, with an investment of 7.08 billion yuan. By the end of 2025, the city of nearly 17 million people plans to have 815km of pipelines.
