China Makes Immense Investments in Railroads, Highways & Airports

Some of the most ambitious transportation infrastructure investments the world has ever seen are taking place in China. Chinese companies are manufacturing state-of-the-art high-speed passenger rail equipment, and the Chinese have a joint venture with Airbus to manufacture passenger aircraft within China. They have also developed their own jet, the COMAC C919 for airline use, which saw its first commercial delivery to China Eastern Airlines in December 2022. A smaller aircraft, the ARJ21, is already flying. Transportation use of all types is soaring in China, including the movement of passengers and freight by air, rail and highway.

In order to boost economic growth within the interior of the nation, China has been forced to boost investment in rail systems. These railways are often capable of running above 250 km per hour.

China’s One-Belt-One-Road initiative, also known as the Silk Road (which refers to the historic overland trading routes that connected China to Europe and the Middle East), is planned to be an enormous network of highways, railways, energy grids and port facilities that could connect more than 65 countries in Asia, Africa and Europe. The Asian Infrastructure Investment Bank (AIIB), which was created in January 2016 to help fund infrastructure projects in Asia, had raised $100 billion in capital for the project, in addition to a $40 billion Silk Road Fund set up by the Chinese government. This ambitious funding and development project has stirred up controversy. Much of the funding is provided to under-developed nations, which are encouraged to create major infrastructure projects. The funds are often provided in the form of loans, and the construction fees are often paid to Chinese firms. It may look good on paper, but in practice, some nations have had significant problems keeping up payments on the loans and may have been too ambitious with their borrowing. For example, in the nation of Sri Lanka, a Chinese state-owned operator took control of a port after the related loan went into default.

China’s largest cities are now home to some of the world’s newest and most advanced airports. Highways and light rail leading to the airports have also been extensively improved and modernized. The Beijing Daxing International Airport is the world’s largest terminal at 7.5 million square feet. It is expected to handle more than 100 million passengers by 2040. The facility has eight runways and an expected annual capacity of 40 million passengers initially. The airport features a “food street” that offers a wide variety of Chinese and foreign dishes, a massive indoor playground for children, spas, workout facilities with showers on a pay-per-hour basis, free Wi-Fi for all, and a variety of hotels within walking distance of gates.

A joint venture was launched between Airbus and two of China’s major aviation companies, AVIC 1 and AVIC 2. Airbus holds 51% of the venture, an assembly plant in Tianjin for the short- to medium-range A320 aircraft. Boeing opened a finish-out facility on an island south of Shanghai in December 2018. It is not a full production plant, but instead provides paint and interior fittings for airliners built in Renton, Washington in the U.S. and delivered to Air China.

Another joint venture between Airbus and AVIC built an aviation factory in Harbin, the capital of Heilongjiang Province. The plant produces Airbus’ wide-bodied A350. AVIC controls 80% of the venture with the remaining 20% held by Airbus.

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