I have a new commentary taking a look at China's road building binge. China now has the world's largest national network of limited access highways. Many might be tempted to dismiss this accomplishment due to China's large territorial size and authoritarian government. But, China's not that much larger than the US in square miles and the authoritarian nature of the government doesn't explain why the nation went nearly four decades with scarcely a highway built. Moreover, China was poor when it started building its road network.
So, is there anything we can learn?
While China is a complex place, and we certainly don't want to import bad habits, this nominally communist nation built it's roads by embracing capitalism, broadly defined, including:
- Tolls to finance the roads based on user fees and the beneficiary pays principle;
- Private capital, especially foreign capital, to fund the roads through an enterprise model of road development and management;
- A decentralized, provincial approach that limited the role of the central government.
Oddly enough, the US has increasingly embracing a more centralized approach and even more socialized model of road development and management.
Perhaps we can learn a few things from China about successful capitalist approaches to addressing our national infrastructure needs.