China needs to continue with its ‘heavy lifting’

By Frank-Jürgen Richter

Global Times, May 10, 2017

China has shown the world it is capable of “heavy lifting” in a wide sense, and there are several examples of this.

First, the surpassing of several Millennium Goals before the target date of 2015, thus lifting millions of its citizens from poverty. This was through the provision of remunerative work both in the special economic zones and in the countryside by allowing innovation and entrepreneurship to thrive. This created two main outcomes: personal wealth was increased so individuals were able to save more, and if working away from home they could return larger remittances to better support their families, especially their children’s education. Their hard work also created goods for export, thus bringing into China much-needed foreign cash. These benefits raised the country’s GDP rapidly, gaining better scores from the international credit rating agencies like Standard & Poor’s and enhancing inward investment, as well as easing other financial limits that bedevil poorer nations.

The government coffers were filled, allowing for greater investment in infrastructure – in better transport systems, communications and enhancing public sanitation. China invested very heavily in its rail and then road infrastructure, easing the twice-yearly predicament faced by the Chinese railway service as millions of migrant workers moved between work and home for the major public holidays. As the ministries designed fast rail services along new routes they freed older railway lines to be renovated and to be used to boost freight service capacity. This has also allowed regular freight train services from China across Central Asia into Europe – cheaper than air freight; not as voluminous as shipping yet much faster than their long trips.

New twin-road highways were also constructed with greater capacity than the old roads with increased safety through the separation of opposing traffic flows. Recent accords have been struck with the Transport International Routier (TIR) that accords the truck and driver simple cross-border passage from anywhere in China to anywhere in Europe without customs inspections. This has greatly reduced the potential for fraud, hijacking and delay – the TIR organization suggests trucks are much more flexible than railways, offering vast benefits for the import/export of certain goods.

Airports have not been ignored in China’s transport revolution. International passenger airports have been renovated, new air-freight hubs created and many city airports built. The latter have created the concept of an “aerotropolis” as a metropolitan region, where the infrastructure and economy are centered on an airport. This development is paralleled by the building of a few hundred new towns across China to house the vast demand for rural to urban migration that is now underway.

David Donaldson, a professor at Stanford University, and colleagues, who studied the impact of building railway networks in the US from 1870 to 1890 and in India from 1870 to the 1930s, showed that the benefits can be substantial. In the US the real increase in income was about 16 percent, and in India 22 percent, though in both cases the gains were not immediate as local infrastructure and modes of work took time to adjust. Further analysis of US data suggests that transport network integration led to a substantial increase in worker output – both in agriculture and manufacturing.

This bodes well for China in the coming years as more food will be required from fewer workers to feed its increasingly elderly population while its manufacturing output needs to be maintained if not lifted.

The second area of “heavy lifting” has been re-linking China to its neighboring nations by extending roads and railways into Central Asia and to Europe as part of the “One Belt and One Road” initiative. New enterprise hubs along the Road will demand further innovative “heavy lifting” as different inter-personal and inter-regional pressures will have to be absorbed. The Belt is a very important development for China, and the world, as it will provide a new mechanism for international trade across what might become a relatively free trading region – Central Asia plus Europe, dynamically connected to Asia via China’s innovation capacity.

Another aspect of the “heavy lifting” is really out of this world. China has just launched its Long March 7 space rocket. This will allow a Tianzhou 1 robotic craft to dock with the Tiangong 2 space laboratory, providing supplies to this orbiting station to increase its functionality prior to the launch of its main module, Tianhe-1. These launches illustrate increasing cooperation in space between the few space-capable nations, incidentally providing security back-up if one nation’s launch fails with consequent issues deep in space. We note that China’s launch comes at a time when US space agency NASA is delaying its heavy rocket launch into 2019. Meanwhile it has been confirmed that China and the European Space Agency (ESA) have talked about joint plans to create a human-occupied moon village.

Finally, there is regional diplomacy. The old East Asian order was formed between the late 19th century and the early 20th century when China was weak and poor. But now there is a different order as China is the world’s second most powerful economy. It seems pertinent to look at how China has responded to world events through the last few decades with various forms of “heavy lifting;” I am confident that a new lift will follow in due course.

The author is founder and chairman of Horasis, a global visions community.