All roads lead to China


Graham Lees


Weekend: February 12-13, 2005


  

AFP

Dwight Eisenhower is more famously remembered for his military career culminating in command of the World War II victory in Europe. But, as slowly as a snail crossing a road, it has dawned on millions of Americans that the 34th president of the United States was also responsible for their country's great economic leap forward in the middle of the 20th century.

Why? He built four-lane roads, lots of them. North-south, east-west, interlinking the 48 mainland states of the US. Eisenhower was the visionary who saw the need to truly unite the states economically through a network of roads.

``Without them we should be a mere alliance of many separate parts,''

Eisenhower said.

Deep in the heart of the Ministry of Communications in Beijing they must have been reading Eisenhower's biography because China is about to embark on a similar feat of great engineering to physically unite the country.

No Eisenhower-like visionary has been identified in China yet, but the end result could be the same: Propelling the country forward to perhaps supplant the US as the world's leading economy of the 21st century.

The aim is to spread development, wealth generation and, ultimately, prosperity more evenly from Changchun in northeast Jilin province to Kunming in southwest Yunnan, and every town in between.

The State Council has given the go- ahead for a 2 trillion yuan (HK$1.88 trillion ) road expansion program aimed at building 40,000 kilometers of new highways, mostly in central and western China, to form an 85,000km network.

In the US, between 1957 and 1969, 66,000 km of highways were newly built or expanded.

Studies since estimate that, among other benefits, at least 25 percent of the US's increase in productivity over the following 30 years was attributable to Eisenhower's interstate highways. They not only linked every major US city, but also the US with Mexico and Canada.

Will it work in China?

``Although they are now talking about what they are going to do over the next 20 years, the basic national grid is going to be in place by 2010, and about 70 percent of that is done already. And that's the economically key part,'' explained an independent strategist in China.

``It's about joining up China for the first time. That's really the analogy with what Eisenhower did,'' said the strategist, speaking to Weekend Standard on condition of anonymity.

``It's all about connecting up markets, goods, labor and consumers in a more efficient way. The consumers get better products, the manufacturers can sell their goods around the country much more easily because transportation is cheaper and more efficient.''

Analysts say it will be people in the more developed areas who get more out of the road-building program to begin with. Although prosperity will move westwards with the roads, some China watchers think that real development in western regions will take another 10 years to achieve.

As the chief executive of Intel, Craig Barrett, observed recently: ``Three quarters of China is off the beaten track. Opening that vast territory and vast population to economic development is a good draw card.''

Straszheim Global Advisors, an economics and financial markets research company with offices in both the US and China, believes the mainland road-building plan will drive economic growth across the whole country. ``Similar benefits should accrue to China as they did to the US. The American heartland was given a great boost, allowing better movement of goods and people all over the country,'' chairman Donald Straszheim said.

``The interior of the US economy would still be somewhat behind were it not for the interstate highway system. China's interior should be similarly lifted. This is important because of the growing disparity between the income levels of the interior and rural versus the coastal and urban areas.''

Ironically, Eisenhower's plan for wide, straight highways with safety ``shoulders'' on each side came from his World War II arch enemy, Adolf Hitler. As Eisenhower stood amid the ruins of a defeated Germany in 1945, he marveled at the simple engineering logic of the autobahns - the like of which had not been seen anywhere since the Romans had built their arrow-straight, highly engineered and paved ``legion marching ways'' across Europe 2,000 years earlier.

As an army strategist, Eisenhower also didn't overlook the military significance: He had seen how much faster the Western allies had progressed after the European invasion of June 1944 once they crossed the German border and found Hitler's autobahns.

``Germany had made me see the wisdom of broader ribbons across the land,'' Eisenhower said.

There were three wisdoms in Eisenhower's interstate road-building plan: Economic improvement, strengthened national security and a brake on roads deaths.

Beijing no doubt also has those three points firmly in mind. And neighbor India has already expressed nervousness.

``While this road-building will not spill over into hostilities between the two countries, it poses an even greater threat. It will allow China to consolidate its economic domination of the region,'' The Times of India forecast.

``The same infrastructure could well be used to challenge India militarily if the need arises.''

In his outline of the new highways network Zhang Chunxian, the minister of communications, also included Taiwan in the link-up, via a 120km undersea tunnel.

Meanwhile, anything which will curb the carnage on China's roads can only be welcomed. The country has the world's worst traffic accidents record - at least 300 deaths per day - accelerating by 10 percent every year.

In 2003, the most recent year for statistics, 770,000 people were injured in traffic accidents. One in seven was fatal.

China's road death rate per 10,000 vehicles is eight times higher than in the US, said a survey report produced at the end of last year by the Medical School of Jinan University in Guangzhou.

So Beijing might be hoping that its highways expansion plan will also bring better safety to China's roads - as it did in the US.

Eisenhower said of America's old road system before his interstate highways plan was adopted: ``The obsolescence of the nation's highways presents an appalling problem of waste, danger and death.''

Even today, fatal accidents on Eisenhower's interstate highways are less than half those on all other roads in the US.

The number of road deaths per day in the US - which has seven times more cars than China - is 117.

Safety was a key feature of the Eisenhower highways: Wide lanes, emergency pull-off shoulders, crash barriers, long entry and exits lanes and cambered curves.

The US system took 12 years to complete at a cost then of US$25 billion (HK$195 billion) - US$164 billion at today's valuation.

China's new road system will cut journey times between cities by many hours. Better roads have already slashed haulage times on some long-distance routes: Beijing to Hong Kong, 25 hours down from 55. Beijing to Shanghai, 14 hours from 31.

Straszheim believes China's road-building plan is timely in view of the ``growing disparity between the income levels of the interior and rural regions and the coastal and urban areas.''

But he is reluctant to put a timeframe on the balancing of prosperity across China.

``It's hard to say how long the catch- up will take. What is important is that all of China should be helped, not just the inland areas. This should not be regarded as Beijing welfare for the inland areas but rather as economic growth for all. Roads travel both ways.''

Beijing remains ambiguous about what part toll roads will play in the new system. At one point last year the central government suggested that toll roads would be bought back by the state. Now, there seems to be a two-tier policy of discouraging them in the east but encouraging them in the west, where private developers will be allowed an extra five years of toll collecting.

For the past 20 years Beijing has relied on private capital to build 90 per cent of intercity highways via toll roads.

Some analysts believe that the toll road system impeded the development of an integrated national grid as local officials sought to capitalise by charging their own tolls or luring foreign investment.

Several mainland toll road companies are listed on the Hong Kong Stock Exchange.

``I believe the toll road idea is not likely to work,'' says Straszheim. ``China needs to think of this highways development plan as for all the country. Let commerce and people pass freely.''

A new roads network will bring more urban development and mushrooming traffic in its wake - plus rising pollution.

The president of the US-based Worldwatch Institute, Christopher Flavin, told a US Congressional committee examining environment and economics: ``As recently as the early 1980s, China relied mainly on bicycles for transportation. By early 2002, the country had 10 million cars, added 4 million in 2002, and another 6 million in 2003.''

The Worldwatch Institute predicts that by 2015 China will have 150 million cars - about the same number as the US in 2000.

``China's cars will create new industries and jobs, but those vehicles will consume not only oil, but valuable agricultural land, as road networks are expanded,'' its report to the US Congress states.

The Institute spotlights the need to create a sustainable world which is likely to have a population of 8 billion people by the 22nd century. It is seeking to focus the attention of governments on the dangers of global warming and weather change caused by rising air pollution.

It says China and neighboring countries face potentially catastrophic health and environmental consequences from rapid industrialization. For many millions of Chinese, breathing the polluted air is already ``equivalent to smoking two packs of cigarettes per day.''

Flavin added in his report: ``Despite this still unsatisfactory record, there is reason for cautious optimism that China is beginning to recognize that environmental sustainability is one of the keys to the country's successful economic development.''

Meanwhile, China's future looks set to follow arrow-straight routes whose origins are set in the past, trodden by the likes of Julius Caesar and Eisenhower.

graham.lees@globalchina.com


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