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Time To Sell Some Toll Roads To China?

Here’s a good sign of Chinese-American cooperation. The Associated Press reports that China wants to invest some of its US government debt in American infrastructure:

China wants to convert some of its mountain of U.S. government debt into investment in renovating American roads and subways, the commerce minister said Friday.

Speaking to a business group, Chen Deming said China wants closer cooperation with the United States in infrastructure, clean energy and technology…

“We hope to achieve cooperation in the area of infrastructure,” Chen told members of the American Chamber of Commerce in China.

Chen said he was amazed at the high quality of American subways and other infrastructure when he visited 20 years ago but many roads, railways and ports today need renovation.

“China is willing to turn some of our holdings of your debt into investment in the United States, hoping to create jobs for the United States,” he said.

I can think of some GOP candidates who might welcome the idea; a Great Wall on the Rio Grande?

But seriously, it might make sense for some state governors to have their trade officers sound the Chinese out on this.  Bridges, highways, airports: the Chinese have built a lot of these lately, and at their best, the work is very good.  (Watch out for the high speed rail, however.)

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  • Jim.

    So the Chinese have sent us mountains of cheap knickknacks, and in return they purchase / construct capital goods that will allow them to collect rent from American citizens more or less forever.

    Granting China Most Favored Nation status was the biggest mistake any American government ever made (including Prohibition).

  • http://www.anchorrising.com Andrew

    Prof Mead,

    Could you provide a brief explanation for the fiscal-layman of how this would work? How can the position of waiting for capital to come back from a borrowing party — the basic definition of holding debt — be converted into new investment in the borrowing party?

    • Walter Russell Mead

      A private company can build a road or take over the maintenance of an existing one in exchange for the right to collect (regulated) tolls from users.

  • Walter Sobchak

    Those assets would be another hostage to their good behavior.

  • Joe

    In other words. Hey guys, we’re noticing Europe and thinking we might want to turn all these promise notes we’re holding into something more substantial.

    Smart move, by them. I’m not sure it’s great for us.

  • Some Sock Puppet

    Not a chance. I’d walk cross-country loaded down like a mule before I used a Chinese built road in my own country. And a toll-road on top of that?

    The scariest idea I heard was buying Chinese made wind-mills. Any bets on how much SCADA-compromised code is present in that equipment?

    We want the same problems of hacking, cracking, spying, bad supply in the pipes, trojans, and sub-par construction outsourced to these untrustworthy clowns and we want in it ever-present in our infastructure?

    Even if that all seems paranoid raving, the fact is they’ve given us nothing to trust them over.

    We have a real figure unemployment rate of around 15% and overcrowded prisons teeming with violence and testosterone where the taxpayer pays for cable and sex changes and soy-free diets, and you’re telling me we STILL need to outsource to the Chinese?

    I can’t make sense of this world any more. It didn’t make sense much before, but at least it had a form of structure. Now it’s just utterly bewildering.

    I’m not proud to say I’ve witnessed the death of commen sense in my lifetime.

    I’m unemployed. I can drive a vehicle, learning to use construction equipment cannot be that hard. I can figure out a video game in 5 minutes, a few levers and physics are not that hard.

    I can learn to pave a road. I can help dig a pit. This is not a hard concept.

    Companies should do more on the job tranining. That’s the one significant thing I’ve noticed in 20 years of working. No one trains. They expect you to walk in knowing everything. It’s unrealistic and to all of our detriments.

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