Transport Infrastructure Development and Its Role for Poverty Alleviation in China

Pro-Poor Urban Development:

China and Africa Workshop

Nairobi, 30th July – 1st August 2012

, Prof. Jianhong Wu

Main Content

1. Outline of Transport Infrastructure Development (TID) in China since 1980

2. The Mechanism between TID, Economic Growth and Poverty Alleviation in General in China

3. International Study Summarized by ADB

4. China Experience and Case Study

5. Identify Opportunity and Future Cooperation

African Students in BJTU

1. Outline of Transport Infrastructure Development (TID) in China since 1980

TID, GDP Growth and Poverty Reduction in China

Unit Item 1980 1990 2000 2010Annul

increase rate

Km Road888,30

01,028,3

001,402,7

004,008,2

004.98%

Km Include： Expressway 0 5,220 16,300 74,100 13.47%

Km Railway 49,900 53,400 68,700 91,200 1.96%

Km Include：High Speed Line 　 　 　 4,200 　

　 Airport 　 110 　 175 　

Billion CNYTotal investment of transport

infra.5.776 19.555

293.149

2603.79 21.79%

Billion CNY GDP 454.561866.7

89921.4

640120.2 15.55%

CNY/person per year

GDP per capita 463 1644 7858 29992 14.40%

Thousand No. of poverty population(*)250,00

085,000 92,400 27,000 -6.93%

Source:1.Statitic Year Book in China 2.Statistic Year Book of Jiaotong and in China *: The criterion of poverty line in China has being subjected to change

Statistically Significant?

2. The Relationship between TID, Economic Growth and Poverty Alleviation in China

The Interaction between TID & Poverty Alleviation

Transport Infrastructure Investment/Development

Bring along the Related Industries Job Creation

Drive the Growth of GDP

Accelarate the Urbanization

Income Increase

Poverty Alleviation

Education & Social Progress

Average Quota Consumed per 100 milliom CNY Railway Investment Input

Item Unit Coefficient

Labour Force Working Day (000) 228.6

Steel Ton (000) 3.33

Cement Ton (000) 20

Fuel Ton (000) 0.55

Sand Cube Meter(000) 31.1

Stone Cube Meter(000) 51.6

Equipment CNY(000) 8500

The Spurring Effect Comparison among Rail, Road and Port(per 100 million CNY Investment)

Item Rail Road Port

Total Output Induced （ 100 mi. ） 3.1937 3.0313 3.0610

Domestic Consumed Value （ 100 mi. ） 2.9620 2.8313 2.8363

Import Induced （ 100 mi. ） 0.2317 0.2000 0.2247

The Value Added Directly Induced （ 100 mi. ） 0.9463 0.9353 0.9297

Personnel Consumption Induced （ 100 mi. ） 0.4350 0.4403 0.4337

Drive the Growth of GDP （ 100 mi. ） 1.3813 1.3757 1.3633

Job Creation （ 10,000 ） 0.2260 0.2457 0.2310

3. International Studies Summarized by ADB

Infrastructure as an Engine of Growth and Poverty Reduction?

• The impacts of one type of infrastructure (e.g., roads) on economic development and poverty reduction can be significantly enhanced by coordinated investments in complementary infrastructure (e.g., power). And unless the initial infrastructure investments is properly operated, the poverty and development benefits will soon vanish.

• R. Ahmed and M. Hossain (1990) found that infrastructure development increased agricultural production by 32%, and increased household incomes by 33% in Bangladesh. In addition, they found such investments to be pro-poor since the landless and smallholder farmers garnered a larger share of incomes from better infrastructure.

• S. Fan (1999) found in India the government expenditures on roads had the largest impact on poverty reduction, as well as having a significant impact on productivity growth.

Impact of Public Investment in Poverty Reduction in China

Infrastructure as an Engine of Growth and Poverty Reduction?

• At the same time, countries with underdeveloped infrastructure see no statistically significant impact of infrastructure investment on growth. In other words, not only can a lack of infrastructure be an impediment to more investment, but it can also be one of the dimensions of the so-called "poverty trap,"

• There are critical and interlinked infrastructure threshold levels that have to be reached before one can trace the growth and poverty reduction impacts of infrastructure investments. For example, most African countries have yet to reach such infrastructure threshold levels. Institutional capacity constraints and infrastructure market distortions raise those threshold levels even further.

• Esfahani and Ramirez estimated that had Africa had East Asia’s growth rate in telephones per capita (5% in Africa versus 10% in East Asia) and in electricity generation (2% in Africa versus 6% in East Asia), Africa’s per capita growth rate would have been almost 1% higher.

4. China Experience and

Case Study

Case Study 1:Case Study 1:

Beijing Hong Kong Rail ProjectBeijing Hong Kong Rail Project

Total LengthTotal Length 2283.2 km with construction 2283.2 km with construction

cost of 40 billion RMBcost of 40 billion RMB

Construction Started in 1992 and Construction Started in 1992 and completed in 1996completed in 1996

There were 12 nationally designated key There were 12 nationally designated key

poverty counties along the project areapoverty counties along the project area

Location and network connectivity of the project

0

500

1000

1500

Regi ons al ong the Corr i dor

Regi

onal

GDP

100m

)（

(CNY）

1995 2005

The Before and After GDP Comparison for the Regions along the Project Area

0

2000

4000

6000

8000

10000

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010时间

GD

P

有铁路时GDP（亿元） 无铁路时GDP（亿元）

With and Without Comparison for the Regional GDP

The Economic Development Level of Different Regions Vary

网络化扩散阶段：北京、廊坊

雏形阶段：沧州、衡水、邢台

雏形阶段：聊城、菏泽、商丘、阜阳、信阳、麻城

形成阶段：九江、南昌

雏形阶段：赣州、吉安

延伸-连接阶段：深圳、东莞、惠州

Rural Per Capita Income in Different Regions in Project Area

Province

RegionsRural Per Capita Income in Different Counties (CNY/person)

Before (1995) After (2005) Growth Rate（%）

Hebei

Provincial Av. 1669 3482 108.63

Heng Shui 1510 3533 133.97

Xing Tai 1469 3280 123.28

Shandong

Provincial Av. 1715 3931 129.21

Liao Cheng 1200 3448 187.33

Henan

Provincial Av 1232 2871 133.04

Pu Yang 1114 2472 121.90

Shang Qiu 980 2346 139.39

Xin Yang 1056 2707 156.34

Jiangxi

Provincial Av 1537 3265 112.43

Jiu Jiang 1493 3269 118.96

Ji An 1445 3267 126.09

Gan Zhou 1478 2760 86.74

National Av. 1578 3255 106.27

No. of Farmer Labor Working outside and Wages Earned in the Project Area

Regions Labor force（ 10,000）

Of which no of working outside（ 10000）

Mobility rate（%）

Total wageearned（ 10000 CNY）

He Ze 398 130 32.66 -

Pu Yang 178 39 21.91 256300

Fu Yang 490 198 40.41 830000

Jiu Jiang 165 61 36.97 450000

Ji An 180 65 36.11 -

Gan Zhou 358 119 33.24 -

National Av.

4.0

Case Study 2: Case Study 2: Shenmu-Yanan Rail Shenmu-Yanan Rail ProjectProject

Total lengthTotal length 386 km with construction 386 km with construction cost of $731.78 millioncost of $731.78 million

Construction was started in 1998 and Construction was started in 1998 and completed in 2003completed in 2003

The Project is located in northern The Project is located in northern Shaanxi Province, a poor and Shaanxi Province, a poor and

landlocked inlandlandlocked inland with five with five nationally designated key poverty nationally designated key poverty counties, Hengshan, Mizhi,Suide counties, Hengshan, Mizhi,Suide Zizhou and QingjianZizhou and Qingjian

The Location of Shenmu-Yanan Line

SOCIAL IMPACT AND POVERTY REDUCTION IN THE PROJECT AREA

• The project provides safe, low-cost, more comfortable transport facilities to larger markets and improved access to better employment opportunities and social services

• During 1997 and 2003, per capita incomes in the project area increased by nearly 300%

• Before the project, the percentage of the population living below the poverty line in the project area was 22%. In 2005, it was 5%,through the creation of more than 370,000 new jobs by the end of 2005.

• GDP in Shenmu in 2000 was CNY2.3 billion and ranked 67th among all the counties in Western China. In 2005, Shenmu’s GDP reached CNY8 billion, placing its economy fifteenth among all counties in Western China, and first among the counties in Shaanxi Province.

Case Case Study 3: Study 3: Yichang-Wanzhou Rail ProjectYichang-Wanzhou Rail Project

Total lengthTotal length 377 km with a construction 377 km with a construction cost of $4,125 millioncost of $4,125 million

Construction started in 2004 and Construction started in 2004 and completed in 2010completed in 2010

The project traverses eight counties and The project traverses eight counties and districts in Hubei Province and districts in Hubei Province and Chongqing Municipality that are Chongqing Municipality that are situated in a mountainous area that situated in a mountainous area that is less developed and poor. is less developed and poor.

SOCIAL IMPACT AND POVERTY REDUCTION IN THE PROJECT AREA

• Sustainable Socioeconomic Growth ( Case Study1 YWR.xls)

• Increased Rural Income and Poverty Reduction( Case Study1 YWR.xls)

• Improved Welfare of Local Communities (Case Study1 YWR.xls)

• Job Creation (Case Study1 YWR.xls)

• Safe and Affordable Mobility (Case Study1 YWR.xls)

• Increased Rural Development and Reduced Living Costs

The Immigration House of YWR

The Immigration House of YWR

Enshi Railway Station

YWR and Passengers

5. Identify Opportunity and Future Cooperation

Is China’s experience transferrable to Africa?

The Cooperation in Transport Infrastructure Development

• The Cooperation in Transport Infrastructure Planning

• The Support on Transport Infrastructure Investment and Operation from China

Is China’s experience transferrable?

• A comparable study is necessary to understand the differences, esp. the Africa contexts and conditions

• Lessons that should be learnt from China’s practice, including the over investment on high quality transport infrastructure, such as expressway and HSR

Education is Ranking No.1 for Poverty Reduction

Education is Ranking No.1 for Poverty Reduction

• BJTU has long history to welcome the students and researchers from African for transport and communication education and study in the fields of engineering ,sciences , management and economics

• The first 2 students from Cameron who studied in BJTU can be traced as early as 1954

• 200 students from Tanzania and Zambia entered BJTU in 1972 according to the Agreement made by the Triple Government for building and operation the Tanzania and Zambia Railways

Education is Ranking No.1 for Poverty Reduction

• There have been students from more than 20 Africa countries studied in BJTU since 1978

• Now there are 75 African students in BJTU

Education is Ranking No.1 for Poverty Reduction

We are very proud of having more than 1000 Africa alumni who are all over the World!

Education is Ranking No.1 for Poverty Reduction

Education is Ranking No.1 for Poverty Reduction