Transport infrastructure development (TID) and its role of poverty alleviation in China

Project theme: 

Professor Jianhong Wu of Beijing Jiaotong University, presented on the topic of "Transport infrastructure development (TID) and its role of poverty alleviation in China" at the Pro-Poor Urban Development: China and Africa Workshop, July 30 to August 1, 2012 in Nairobi, Kenya.

This paper summarizes studies carried out on the impacts of several major infrastructural developments in China. Two stages have been identified. At first, the infrastructure investment is faster than the rate of GDP growth. Then in the second stage, GDP grows and poverty levels reduce. A cyclic relation has been identified in the relation between TID and poverty, and this has been traced using an input-output quota model matching steel and cement with job creation and consumption levels. International studies (ADB) conclude that:

 1.    Pro-poor impact can be enhanced by coordinated investment (e.g. in power supply)
 2.    Without sustained maintenance the impact on poverty is not sustained
 3.    There is a higher impact in poorer areas, BUT
 4.    The initial level of development is crucial – in very poor areas there is no impact.

In the Chinese cases presented (Beijing-Hong Kong railway, Shenmu-Yanan Railway, Yichang-Wanzhou railway) there was faster economic growth through the supply of labour, materials and services during construction, increased labor mobility and agriculture and tourism development.  Poverty reduced dramatically but there was also a problem of displaced persons as an unwanted side-effect. The question is, can this learning be transferred to Africa? Or will planned railways and expressways there become “white elephants”? Comparable studies are needed on Chinese investments in Africa. Maps were shown of potential Chinese investments in infrastructure but these must be well planned. As a final comment, the best strategy ultimately for poverty reduction is education.