By Chengdu Living, September 10, 2012
China’s recent stimulus push,
involving dozens of infrastructure projects and hundreds of billions of
yuan, boosted stock prices around the world, bolstered confidence in the
Chinese economy and took the country one giant leap further down the
urbanization road. But as with most of China’s big plans, the implementation
tends to be a chaotic mixture of scientific efficiency and headlong, creative
destruction. Transportation in particular presents a knotted conundrum of
middle class aspirations, global market forces, shady construction projects and
big, black clouds of CO2.
The Volkswagen production facility in
Longquan, 35 minutes southeast of Chengdu’s city center, represents the global,
scientifically efficient side of China’s infrastructure boom. The facility
employs nearly 7,000 workers, who, together with more than 400 robots and
amazing feats of engineering like Durr’s Eco Dry Scrubber, churn out sedans for China’s car-hungry middle class. Volkswagen
plans on producing 1 million automobiles a year out of Longquan, most for the
southwest China market.
Sagitars are already rolling out of
the facility’s doors and they will soon be joined by the new Jetta. At around
80,000 yuan, both cars target the growing middle class in southwest China. This
emerging consumer wants to not only drive to work, but also take day trips
out to Leshan, Ya’an and Xichang – the new nongjiale (homestay) destinations
for urbanites seeking solace from the city.
Chengdu has an estimated 3 million
registered vehicles and about 1,000 more are added every week. The city,
including outlying districts like Dujiangyan, Dayi and Longquan, has a
population of 14 million and city planners expect that number to increase to 20
million in the next 15 years. Right now 40 out of 1,000 of own a car, but
that ratio is expected to grow to at least 200 per 1,000 in the next decade.
“People in Chengdu want to be mobile
and value being mobile,” said Christian Koch, VW China’s executive
vice-president of products and logistics. “We go where the customers are.”
One huge traffic jam
China currently has an urban
population of 600 million people. In 15 – 20 years, 350 million more will be
added, an increase equal to the entire population of the United States. By
2030 there will be 1 billion urbanites spread out across 220 cities, each with
at least 1 million in population, together accounting for almost 90% of the
country’s GDP.
One of the biggest questions facing
China is how to provide adequate and efficient transport for all of those
urbanites. One quick look around shows that the country is going full-steam
ahead with roadway, highway, railway and subway projects. Chengdu has added two
Metro Lines, two high-speed rail links (and another on the way to Leshan),
thousands of miles of freeway, and a host of rail links in the last 10 years.
Yet the roads and rails are still jammed and the buses and subways are almost
always packed.
Today Chengdu is once again a big
construction site. There was a small breather for a year after the Metro Line 1 was completed, but now the entire
Second Ring Road is receiving an upper deck. Construction on the ring road has
made traffic almost unbearable and it will stay like this until the Fortune Global Forum next June, the deadline for construction set by the city’s
authorities. The recent opening of Metro Line 2 may provide a saving grace. The line, which stretches east to
west across the city, had a soft opening earlier this month and is fully
operational as of Sunday September 16th. The city
plans to roll out two more lines in the next few years, but the plans also call
for an elevated level for the First Ring Road. Citizens are bracing for another
five years of traffic jams.
This year’s Chengdu Motor Show will
attract up to 600,000 people – buyers, dealers and outright gawkers – who will
check out the 420 different models on display. FAW VW already reported 1,000
orders of the new Jetta, on display at the show, and those numbers are sure to
rise in the weeks ahead. As Chengdunese place orders in the largest car boom
in the history of mankind, a plaintive voice of opposition makes the rounds on
Sina Weibo. Entitled “Chengdunese have had
enough“, the
post laments a decade of traffic jams and the numbing spectre of a decade more
ahead:
“10 years ago, when they started
re-building the transport network, the Party and the government told us: today’s
inconvenience is for tomorrow’s efficiency. We endured! 10 years of
construction and traffic jams later, the Party and the government told us: the
subway is on its way, the traffic jams are almost over. We endured! Construction
on the metro started everywhere; roads were blocked, one couldn’t take a left
anywhere and the city was riddled with one-way streets. The Party and government
told us, only a few more years and it will be over. We endured!
The big boss changed and now we’re
back to building again. Today I was two hours late for work and had my salary
docked. Please tell me, how long must we endure this? Urgent request:
Relevant organs, please start managing the city planning. Don’t build
recklessly everywhere, or, as soon as someone new takes charge, start digging.
You have “professional cars” and “white license plates” all we can do is
endure. No more
A mad scramble for the cash
A mad scramble for the cash
Building a functional, modern, and
sustainable transport network up from scratch is a huge undertaking. Countries
with decades of experience, billions in funds and the added luxuries of low
population density and manageable social pressure still consider traffic
management to be one of the most complex and expensive civil engineering
challenges around. China has but 20 years of practical experience, a massive
population and a vocal and growing middle and upper class that wants good
transportation. But they do have the cash.
Even so, one major issue impedes the
efficient use of all that cash. Namely, serious inter-ministerial conflict,
corruption and miscommunication. The Ministry of Railways and the Ministry of
Transportation do not work that well with each other, or the half-dozen other
government bodies involved in road and rail construction, such as the Public
Security Bureau, the Bureau of Standards and various provincial construction and
transportation bureaus. Add to that the fact that most railway construction
companies also own the highway construction companies, allowing the rail people
to move into road building (such as the failed venture in Poland). There is a different government body in charge of highway
statistics, construction, maintenance, and planning; every single one is
plagued by corrupt officials, unscrupulous contractors and a dozen internal and
external factions competing for central government funds.
Worse still, much of that funding is
now being handled on the local level, so corruption, incompetence, and
injustice go unchecked by any form of authority. Farmers are pushed off of
their lands while local officials siphon off compensation funds; contractors
under-bid and then either demand more money or do a sub-par job; and ministry
officials rotate in and out of office, passing the buck on to the next guy.
Projects are often held hostage to the political aims of leaders out to impress
someone, as may be the case with the Second Ring Road improvements, so
efficiency and need take a back seat to immediate political or material gain. The
general manager of an expressway construction company is a coveted position and
everyone from low-level transportation officials from the townships to the
provincial level construction bureaus is vying for the spot, or influence with
whomever has temporarily landed it.
Yet even with all of the chaos and
piracy, this movement will not stop. Urbanization is the key to transforming
China into a consumer-based society and consumption means, among other things,
building roads and buying cars.
An unstoppable force
In 1986, 28.2% of the Chinese
population used public transportation, 62% rode bikes and a mere 5% drove cars.
By 2009, those numbers changed to 38.9%, 18% and 34% respectively. How can
China promote public transportation among the middle classes and thereby pull
some percentage points away from car ownership? Massive upgrades in public
transportation are big help, as are usage incentives or dis-incentives. Guangzhou
and Beijing are already regulating usage and have quotas in place. Every other
major city in China, including Chengdu, is mulling over similar regulations,
while barreling forward with infrastructure projects to help alleviate the
pressure.
And the verdict is still out on
electric cars, once the anointed savior of the driving class. Although the technology
for electric batteries exists – and the Chinese are some of the best in the
world at making batteries – integrating new and old tech in an affordable and
efficient car has so far escaped even the most advanced automobile
manufacturers. No manufacturer has put together an electric car with mass
appeal yet and even if they did, there is still a huge elephant lurking in the
corner: even promising prototypes have to get their electricity from
somewhere.
For China today, coal is the number
one source of electricity production. China handles 1.5 billion tons of it
annually, by far the number one producer and consumer of coal in the world.
According to the International Energy Agency, ”China’s share in global
coal production is almost four times that of Saudi Arabia’s production of oil …
(and) … China’s share in global coal consumption is more than twice that of the
demand for oil in the United States.”
Even if electric cars were able to
minimize exhaust, the coal China uses to power the electrical grid would more
than make up for any decrease in pollution. China currently has around 70
million cars on the road and that number may increase to somewhere between 400
and 550 million by 2030. The added exhaust will pump an approximate 3 billion
tons of CO2 into the atmosphere; we inject 7 billion tons into the sky today.
But even that may not be the end of China’s growth. The
estimates for 2030 hover around 200 automobiles per 1,000 people (up from 40
per 1,000 today). In Europe the ratio is 400 to 1,000 and in the US it is as
high as 600 to 1,000. If Chinese drive as ardently as American.
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