China's Sensible Infrastructure Boom

Moneybox
A blog about business and economics.
Nov. 28 2013 2:47 PM

China's Sensible Infrastructure Boom

74989441
Shenzhen Bay Port.

Photo by PAUL HILTON/AFP/Getty Images

China is an extremely large country with over triple the population of the United States of America. It's also got a moderately corrupt government and a massive surge in infrastructure investment going on. Under the circumstances, there are doubtless dozens of ill-conceived projects under way on any given day. But I am astounded by the regularity with which things I see western observers denounce as examples of excess end up looking quite sensible.

Consider Shenzhen's new Terminal 3 which everyone seems to agree is great, but which Simon Calder says "could prove a white elephant" given "overseas airlines' appetite for flying to the city as opposed to the more established nearby hubs."

Advertisement

Specifically he notes that Shenzhen's airport "suffers from the proximity of Hong Kong airport, with which it has a direct ferry connection" as Hong Kong "handles twice as many passengers, with vastly more international destinations."

So how about that Hong Kong airport? Well, it turns out that Hong Kong's airport is so popular that it's running out of capacity and the airport authority wants to build a third runway. Given the geography of the airport it's a challenging engineering task that will cost over $17 billion and take at least eleven years to complete. Under the circumstances, it seems to me that it makes perfect sense for the nearby city of Shenzhen to be expanding and upgrading its own airport. Calder says the alleged white elephant in Shenzhen cost just $1 billion to complete which certainly makes it look like the cost-effective way to expand local airport access. It is no doubt true that many airlines, especially western ones whose customers may not even know what Shenzhen is, will prefer to fly to Hong Kong. But a terminal that exists today (as opposed to in 2024) and that cost $1 billion to build (rather than $17 billion) is naturally going to have some attractions.

Meanwhile, Hong Kong aside Shenzhen's urban population of seven million makes it a bit larger than the Dallas-Fort Worth metro area. Slightly smaller American cities such as Houston, Philadelphia, Miami, Washington, and Atlanta all have their own major airports. Why shouldn't Shenzhen? Historically it hasn't needed one because Shenzhen's been poor and close to Hong Kong. But with Hong Kong's airport full and China getting less-poor by the day, this seems like a great time to rectify that. For now Singapore, Bangkok, Seoul, and Tokyo seem are the only international destinations served by the airport. But is it really so crazy to think a city of seven million will want to be able to fly to Hanoi, Manila, Jakarta, Kolkata, Kuala Lumpur, Syndey, Dubai, Karachi, and Los Angeles without needing to first drive to the overcrowded airport in the city next door?

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

The Slatest

Ben Bradlee Dead at 93

The legendary Washington Post editor presided over the paper’s Watergate coverage.

This Scene From All The President’s Men Captures Ben Bradlee’s Genius

Renée Zellweger’s New Face Is Too Real

Sleater-Kinney Was Once America’s Best Rock Band

Can it be again?

Whole Foods Is Desperate for Customers to Feel Warm and Fuzzy Again

The XX Factor

I’m 25. I Have $250.03.

My doctors want me to freeze my eggs.

The XX Factor
Oct. 20 2014 6:17 PM I’m 25. I Have $250.03. My doctors want me to freeze my eggs.
Technocracy

Forget Oculus Rift

This $25 cardboard box turns your phone into an incredibly fun virtual reality experience.

George Tiller’s Murderer Threatens Another Abortion Provider, Claims Free Speech

The Congressional Republican Digging Through Scientists’ Grant Proposals

  News & Politics
The World
Oct. 21 2014 3:13 PM Why Countries Make Human Rights Pledges They Have No Intention of Honoring
  Business
Moneybox
Oct. 21 2014 5:57 PM Soda and Fries Have Lost Their Charm for Both Consumers and Investors
  Life
The Vault
Oct. 21 2014 2:23 PM A Data-Packed Map of American Immigration in 1903
  Double X
The XX Factor
Oct. 21 2014 3:03 PM Renée Zellweger’s New Face Is Too Real
  Slate Plus
Behind the Scenes
Oct. 21 2014 1:02 PM Where Are Slate Plus Members From? This Weird Cartogram Explains. A weird-looking cartogram of Slate Plus memberships by state.
  Arts
Brow Beat
Oct. 21 2014 9:42 PM The All The President’s Men Scene That Perfectly Captured Ben Bradlee’s Genius
  Technology
Technology
Oct. 21 2014 5:38 PM Justified Paranoia Citizenfour offers a look into the mind of Edward Snowden.
  Health & Science
Climate Desk
Oct. 21 2014 11:53 AM Taking Research for Granted Texas Republican Lamar Smith continues his crusade against independence in science.
  Sports
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.