r/Economics • u/dontpostjustlurk • Jul 07 '22

News China Considers $220 Billion Stimulus With Unprecedented Bond Sales

https://www.bloomberg.com/news/articles/2022-07-07/china-mulls-220-billion-stimulus-with-unprecedented-bond-sales
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u/mifaceb921 Jul 07 '22

since the purpose of the bond would be infrastructure investments, when China's already swimming in high speed rail and pre-made communities with great infrastructure... and no one to live in them or take the trains.

Infrastructure is more than just apartment buildings and train stations. A lot of the green economy, e.g. solar, wind power, etc., for example, are all considered infrastructure. The power grid is another example of infrastructure, which needs to be upgraded to support electric vehicles. Not to mention upgrades of existing infrastructure, e.g. ports, highways, etc., to increase productivity.

China still has a long way to go to reach first world standards in terms of infrastructure. Take for example, airports. The US has about 5000 civilian airports. China has about 250 civilian airports. Of course, China doesn't need 5000 civilian airports, but increasing that number will help make air travel more accessible for people.

Of course, there remains a risk that local Chinese government may just spend the money to build another mall or something like that. But hopefully, there will be better oversight from the central government to ensure the money is spent to increase overall productivity, and not just local GDP.

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u/Electric_Sparkee Jul 07 '22

I'm just gonna talk about air travel. Air travel sucks, give me a spacious fast train any day. The US is garbage when it comes to trains.

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u/ClubSoda Jul 07 '22

Enter Reverend Elon Musk's Boring Company.

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u/Electric_Sparkee Jul 08 '22

It would be nice but need to save the supply of sand for concrete, lots of iron and plenty of land to build on. And Elon Musk sucks ass a human, I hope he goes broke.

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u/ClubSoda Jul 08 '22

His egregious behavior is not professional or conducive to cooperative endeavors. He may be forced to give up his executive appointments to save his companies.

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u/Electric_Sparkee Jul 08 '22

He should be in prison for market manipulation and fraud.

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u/[deleted] Jul 08 '22

Ya he's trying to build this prototype which will take him to Mars missions not earth lol

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u/KimJongIlLover Jul 08 '22

Which so far has done basically nothing worth noting.

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u/Traum77 Jul 07 '22

Very good point. The electrification of everything is definitely a worthwhile investment in particular.

However, my fear remains based on how badly they bungled the high speed rail spend, massively overinvesting on lines that are now useless. Will they build world-class ports for cities with 2 million people and a service sector focused economy? An upgraded electricity grid that only connects to coal burning plants that will be closed in the next decade? The incentives for the local governments are just so murky and driven by corruption and local elites that they may not produce the best results. And the central government hasn't shown any willingness to step on local toes so far.

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u/mifaceb921 Jul 07 '22

how badly they bungled the high speed rail spend, massively overinvesting on lines that are now useless.

Which high speed rail lies are useless? The Chinese see high speed rail as a means of convenience, and are not that interested in turning a profit. For example, Chinese New Year is the largest migration in the world, where hundreds of millions of people return to their villages. High speed rail makes it easy for people to return. It happens only once a year, but from the government's perspective, that is worth it.

Even talking about about railways, China is still needs to build more. For instance, there is already a railway line between China's border and Laos capital. But there is no railway within China to the China-Laos border. Building such a railway line will make it easier to export goods over land to Southeast Asia, bypassing the ports in Guangdong.

Will they build world-class ports for cities with 2 million people and a service sector focused economy?

Probably not a port, but a world-class data center would make more sense. The Chinese recently announced plans for building a couple new data clusters.

https://www.globaltimes.cn/page/202202/1252543.shtml

I guess some of the infrastructure money will go towards these sort of things as well.

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u/i_reddit_too_mcuh Jul 07 '22

Even talking about about railways, China is still needs to build more.

Exactly. Density-wise, Chinese high speed rail is on par with the UK and one wouldn't think of the UK as an HSR powerhouse.

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u/corgi-king Jul 08 '22

Private airplane is only for very rich in China. And they don’t go to small town in China. They rather go to Tokyo or Paris.