Comment by maxglute

Comment by maxglute 17 hours ago

9 replies

> reduces travel time between the two sides of the canyon from two hours to two minutes.

Think of it this way.

Every 2 hours round trip to 2 minutes saves imported fossil. For trucking/freight that's like ~$80 of diesel both ways.

PRC construction workers, though less abundant is cheaper than it ever will be. So best time to build infra is always now, especially one that reduces long tail imports.

Every piece of infra that cuts time (apart from cutting X time) is basically frontloading (domestic) steel and concrete to reduce future oil imports (and emissions). Rough napkin math, 2B rmb construction cossts = ~3m barrels of oil, 2b kms of travel. Shaving off 2hrs (guestimate ~150km) and it pays itself off in imported fuel metric between ~10m trips (for freight , more for passenger). Guizhou has 40m people, if a fraction goes to see the bridge, do some tourist shit (induced demand) it would go a long way to basically subsidize a bridge that cut logistics times and wear on tear for the region.

thefourthchime 5 hours ago

Yes, but on the other side of the coin is the pending maintenance for all of these projects. You don't just build a road, rail or bridge anad then be done with it. They all require upkeep. If the project itself was a jobs program masquerading as a infra, they'll just let all these fabulous projects rot as it won't make sense to keep them up.

  • maxglute 2 hours ago

    TBH potential future problem, scales to whether/how much construction industry get captured to point where maintenance costs is onerous. Developed west forgets, upkeep doesn't have to be expensive to defer which snowballs costs. The broader consideration for PRC is they are per capita, infrastructure POOR, i.e. less unit of infra in variety of categories per capita - there simply isn't that much excess infra relative to population.

    Some of the bad investments won't pay back, will get abandoned with demographic change (baked in lower utilization when population drops), but IMO infra serves 10s millions, cuts millions of barrels of oil imports has good chance of paying for itself. Like 2hour -> 2minute infra for 2B rmb = 0.1% of Guizhou GDP. Seems like a no brainer.

davedx 10 hours ago

Fantastic analysis of the merits of infrastructure investment. Thanks for working the numbers.

dspillett 5 hours ago

> So best time to build infra is always now

Like planting trees, now is the second best time to build infrastructure. The best time is a decade or two or more ago.

Fraterkes 8 hours ago

Why is construction cheaper than it ever will be? Because wages are rising in China?

  • maxglute 2 hours ago

    Undereducated workforce willing to do hard construction decreasing -> wagse rising. There's still big/experienced construction work force, build while it's cheap, build bigger and more than you have to etc.

  • dspillett 5 hours ago

    > Because wages are rising in China?

    As an average, definitely. Whether that is relevant to the area in question I don't know. Materials and fuel costs are rising globally too, China's population-size based buying power shields them from that a little more than some places, far from completely.

codethief 7 hours ago

> So best time to build infra is always now

What about maintenance costs?