Since President Joe Biden’s Pittsburgh speech, in which he unveiled an ambitious U.S. infrastructure plan of more than $4 trillion, vowing to compete with China and reinvent the U.S. economy, the media in both countries have been at a peak of commentary on the infrastructure plan. In general, the focus of public opinion in the two countries was completely different, with the U.S. concerned about taxes, financing channels and the like; the Chinese side, because the main complaint of the plan is to compete with China, in addition to being concerned about the shortcomings of the U.S., mocked Biden for “copying China’s homework” in a screen.
It’s right to copy China’s homework, but it’s the wrong homework book
There is no doubt that the U.S. infrastructure plan was influenced by China’s 2009 5 trillion yuan (one said 4 trillion) government investment bailout plan. But the Chinese bailout in 2009 made China sink deeper into the debt mire and had a great negative impact. This time, the Chinese public opinion field that “copied China’s homework” is not talking about this, but about China’s “new infrastructure strategy” launched during the 2020 epidemic.
For example, intelligent digital infrastructure is the leading direction, digital science and technology innovation infrastructure is the underlying support, modern resources, energy and transportation logistics infrastructure is the artery of the national economy, advanced materials and intelligent green manufacturing infrastructure is the foundation of a strong manufacturing country and a strong quality country, and modern agriculture and biotechnology is the foundation of a strong country. The infrastructure of modern agriculture and bio-industry is the foundation of bio-economy, etc. However, to say that “this ‘American Jobs Plan’ launched by Biden is actually a copy of China’s ‘New Infrastructure’ plan” is to take another workbook (which is mostly on paper) by mistake. paper).
According to “copy homework”, Biden’s plan is similar to China’s new infrastructure plan, mainly divided into the following five major directions: first, to get rich, first build roads; second, manufacturing power; third, invest $300 billion to upgrade the power grid, communication network and drinking water system; fourth, invest $300 billion to build buildings and upgrade schools. It is the U.S. version of ‘China’s old reform’; 5, invest $400 billion to improve care for the elderly and disabled, and said “the United States does not have a national health care system, which is Biden’s half-abolished ‘Obamacare program’ A return to the half-abolished ‘Obamacare program'”.
The author highly praises, “From the plan itself, there is no doubt that this is a once-in-a-century plan in American history. Just like China’s ‘new infrastructure’ plan, it is a long-term, forward-looking plan that will benefit the country and the people. And then incidentally praised the Chinese Communist Party: “Biden copied China’s homework, but also happens to confirm that China has been one step ahead of the United States in strategic deployment, winning at the starting line”.
Biden’s “American Jobs Plan”, although it also talks about the same content as China’s new infrastructure plan, but intelligence, digitalization is the United States ahead of the original, green energy is the Democratic Party’s heart to implement the strategy. These are not China’s original, the United States naturally can not talk about copying China’s homework. The real “copy of China’s homework” is actually the government’s massive printing of money to invest in infrastructure, because the United States has never advocated government investment. From the western development period, the United States is accustomed to take the funding route is to use policy to leverage private investment, the entire railroad investment, private capital accounted for more than 85%. The American Jobs Plan and the other two plans require a total of more than $6.2 trillion in funding from only one source: federal funds. This means that there are only two ways to print money and tax money.
This is really a “copy of China’s homework”, but the homework book is China’s 5 trillion bailout plan in 2009. At that time, the world was in financial crisis, the Chinese government invested 5 trillion to strengthen infrastructure construction, which was hailed by many Western media as saving the world and greatly increased its international status. In his Pittsburgh speech, Biden made similar statements when he spelled out the purpose of the plan, such as to show “allies the power of the United States,” and tied his ambitious domestic agenda to plans to restore U.S. influence abroad.
The Other Half of China’s Intentionally Forgotten High-Speed Rail Story
While Chinese public opinion has been wantonly mocking the antiquated and aging U.S. rail system and the new and avant-garde Chinese high-speed rail, it has deliberately left out the one issue that was raised until last year: the heavy debt of high-speed rail construction and the severe overcapacity.
Without looking at the ratio of investment to output (operating data) of China’s high-speed rail, one would indeed marvel at the glorious achievements of China’s high-speed rail in a short period of time. After understanding the full story, one realizes that China has paid a huge price for the construction of high-speed rail, and its debt has become a huge “gray rhino” for China’s financial risk.
Zhao Jian, director of the Center for Urbanization Studies at Beijing Jiaotong University, published a long article in January 2019 (Caixin.com), citing specific operational data on China’s high-speed rail projects: by the end of 2018, China’s high-speed railroad mileage had reached 29,000 km. People usually only see China’s world-leading mileage of high-speed rail operations and the speed of high-speed rail, but they are blind to the other side of the story – the world-leading debt and operating losses of high-speed rail, and the serious deterioration of China’s transportation structure. China’s high-speed rail is mainly financed by debt, and as of September 2018, China Railway’s debt has reached $5.28 trillion. However, the debt and passenger revenue data released by China Railway can be judged as follows: even without considering the operating costs of high-speed rail, the entire transportation revenue of high-speed rail is not enough to pay the interest on the loan for the construction of high-speed rail.
Zhao Jian also pointed out that, except for the high speed rail transport capacity on the Beijing-Shanghai and Beijing-Guangzhou corridors which are highly utilized, the other high speed rail projects have a large amount of idle capacity and serious losses. The indicator that best reflects the efficiency of railroad transport capacity utilization is transport density, i.e. the average transport turnover completed per kilometer of railroad in a year (the ability of each kilometer of railroad to generate annual transport revenue.) In 2015, the average transport density of China’s high-speed railway was around 17 million km/km, while the average transport density of Japan’s high-speed railway was 34 million km/km, which is twice as high as the average transport density of China’s high-speed railway. Zhao Jian also pointed out that the high-speed railroad built in China in more than 10 years has been more than two times the sum of high-speed railroads built in other countries and regions of the world in half a century. Almost none of the world’s high-speed railways can rely on passenger revenues to cover construction and operating costs, and most are operating at a loss or are subsidized by the government, a situation that is even more serious in China.
Zhao Jian’s article summarizes several major problems with China’s high-speed rail construction, such as huge debt, low operational efficiency, serious distortions to the entire Chinese transportation system, and the resulting environmental pollution. The authors of the “Copy China” article largely ignore it, as if it never existed.
How should the U.S. view China’s “copying” argument?
Compared to the silence of the European Union, Japan and other countries about the U.S. infrastructure program, I think it is also beneficial to have an active or overly active Chinese public opinion. Americans may not know the famous Chinese story of Emperor Tang Taizong, a wise ruler who believed in the truth that “if you listen to both sides, you will see the light, but if you believe in both sides, you will see the darkness”, and lamented after the death of Wei Zheng, a straightforward admonisher: “If you use copper as a mirror, you can correct your clothes; if you use history as a mirror, you can know the rise and fall; if you use people as a mirror, you can understand the gains and losses. “, lamenting the death of Wei Zheng, so that he lost a mirror. But I believe that many Americans will know the famous concept of “Information Cocoons” proposed by Harvard professor Cass R. Sunstein.
“If you focus only on your chosen field, if you focus only on a particular source of information, if you focus only on what pleases you, over time you will, like a silkworm, shackle yourself in a cocoon of self-weaving, and thus lose the ability to see things holistically.”
China invested 5 trillion yuan in 2009, and local governments invested billions of dollars (there is no accurate figure, the official figure has more than 20 trillion and more than 30 trillion versions), thus distorting the structure of China’s economy and sinking deeper into debt, the United States should learn from this experience how to do for the future of the United States, as long as they are not trapped in the cocoon of information. For those who are used to interpreting the U.S.-China debate in terms of totalitarian dictatorship, right and left, please be careful not to get trapped in the “information cocoon” this time. Whether in the United States or China, most of those who are concerned about this project are not focused on the political system, but only on the feasibility of the project and its effects, especially on their own countries.
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