CRUMBLING ROADS, FALLING BRIDGES

The long-term ability of a nation to compete successfully in the global economy depends heavily on the quality, quantity and condition of its infrastructure. Highways, bridges, railroads, air transport, transport integration, power generation, power distribution, water supply, water treatment, sewage treatment and other key elements are the ultimate determinant of a nation's economic viability. For example, oil reserves are worthless if there are no pipelines to deliver it to markets. A nation rich in automotive and truck resources loses economic strength if its roads and bridges are allowed to decay.

So what do the news dots say about say about America's future competitive infrastructure strength when compared with that of emerging super power like China? How does Europe feel about infrastructure?

• Xinhua. September 1: China's Three Gorges Project is the largest water conservation project in the world. Upon completion, the Three Gorges Project will be the world's biggest hydropower plant in terms of both total installed capacity and annual average power generation volume. The Three Gorges Hydropower Station will be hooked up with thermal power and hydroelectric grids in central and eastern China, thus improving the economy and reliability of the electric grids. Construction will provide jobs for 250,000 people.

• Xinhua. September 12: Beijing takes steps to privatize urban infrastructure. The Chinese capital of Beijing is inviting investment in construction of 50 urban infrastructure projects and public works. Projects on the investment list include the No. 10 subway total length of 52 kilometers, five sewage trash plants, five trash treatment plants, and a plant for treating chemical waste. Completion of the 50 projects will require over 60 billion yuan ($7.3 billion).

• Straits Times. September 12: A high-speed railroad linking Beijing and Shanghai could end up costing more than 400 billion yuan ($48.2 billion). The 1,300km railway is likely to be so expensive that it will be second only to the giant Three Gorges Dam project, the official China Daily said.

• Yahoo. September 12: The U.S.-China Business Council, the principal organization of American companies conducting trade and investment with China, today unveiled a wide-ranging study of the air express industry in the Peoples Republic of China. The study makes clear that a strong and fully functioning integrated express delivery system, operating nationwide in a supportive policy environment and drawing on the experience and resources of the world's top air express integrators, will bring substantial benefits to the Chinese economy in the form of higher productivity, increased business investment and employment, and greater global competitiveness.

• German News. September 5: The Italian European Union Presidency submits a plan to EU leaders which calls for pumping billions of euros into European Union roads and transport systems. Designed to both create domestic jobs and repair a fraying infrastructure, the plan will appeal to both Italy and Germany, which have fallen back into recession.

• USA Today. September 5: Engineers say country (USA) is deteriorating. Congested roadways, crumbling bridges and schools, and outdated drinking water systems are evidence that America's infrastructure is falling apart, the American Society of Civil Engineers reported. The analysis of 12 key categories of infrastructure concluded that many are worse than they were in a similar study two years ago. The report says $1.6 trillion would be needed over five years to fix the problem. (Bush has requested infrastructure appropriations of $287 billion spread over six years). The Organization's President, Thomas Jackson, cited the power blackout in the Northeast and Midwest last month as one example. The report said investment in energy transmission fell to $2 billion in 2000 from $5 billion in 1975.

• New York Times. September 4: Bush firm on tax cuts as remedy for economic languor. Undaunted by predictions that federal deficits might balloon in the next decade, President Bush said today that permanent tax cuts were the best way to reinvigorate the economy and keep it going.

By connecting a few news dots, it is clear that China will reap enormous competitive advantages in pouring money into its infrastructure, while the U.S. allows its to deteriorate. By combining lower wage rates with superior infrastructure, China will in the long term reach superpower economic status and eventually could eclipse the USA. By pouring money into its infrastructure in the short run, China will create millions of jobs for its unemployed. By pouring money into tax breaks for upper income taxpayers, the U.S. will discourage consumer spending and exacerbate the problems with its "jobless recovery."