US seeks China’s help with ailing infrastructure

30 October 2013 0 Comments

30 October 2013

China’s investment in Africa is well known. Its investment in the UK has rocketed in the past few months. Now the US wants Chinese cash and services to upgrade its ailing infrastructure. Rod Sweet reports

The US Chamber of commerce has released a report encouraging Chinese investors to help out with the estimated (minimum) $8 trillion needed between now and 2030 to upgrade and maintain America’s transport, energy, and water infrastructure.

The report claims to show that the pressing need for resources – totalling some $455 billion per year – to modernize US infrastructure can create new opportunities for Chinese investors to act as “providers of capital, goods, and services” in civil engineering, architecture, construction, and contract and life-cycle management.

The Chamber believes that China, as the United States’ second-largest trading partner, is well positioned to participate in US infrastructure expansion and modernisation.

“This type of investment would benefit both of our countries, strengthening our relationship and enhancing global stability and prosperity,” said US Chamber President and CEO Thomas J. Donohue.

An estimated $8 trillion is needed between now and 2030 to upgrade and maintain America’s infrastructure

Anticipating controversy at home, however, the Chamber was quick to say that an influx of Chinese capital and construction services would require “careful navigation” and that Chinese parties and their US counterparts would need “planning and patience”.

The challenges outlined include the usual concerns relating to China: national security concerns, adverse reactions to foreign ownership, quality control and product safety, inadequate legal remedies, and more.

But the Chamber concluded that if America is to undertake “the most significant expansion and modernization of its infrastructure since the 1950s”, China’s assistance would be very helpful.

“Unlike previous infrastructure booms,” the executive summary says, “this new period is taking place in the context of significant pressure on federal, state, and local budgets, suggesting that substantial private capital will be necessary to finance the new infrastructure investments.”

It goes on: “This expansion is also taking place in a dramatically changed global economy that boasts new players in global trade and investment. The most important of these new players is China.”

The report, “From International to Interstates: Assessing the Opportunity for Chinese Participation in U.S. Infrastructure,” is available here.