Yesterday’s New York Times story on subway construction in China has an interesting detail:
“Mr. Chan said that it cost about $100 million a mile to build a subway line in Guangzhou, including land acquisition costs for ventilation shafts and station entrances.
“By contrast, New York City officials hope to build 1.7 miles of the long-delayed Second Avenue line in eight years at a cost of $3.9 billion, or $2.4 billion a mile.
The Chinese are spending about one third as much as the U.S. on stimulus, but apparently they are getting 24 times more for their money. (A much larger fraction of China’s money is being spent on durable infrastructure.)
When my brother was in China a couple years before the Olympics there was a LOT of construction. He said that one morning he was out early and noticed a mason was already on site. But he appear to be cooking in the trench he worked in. Then my brother got closer and realized the fellow LIVED in the trench. Then he saw that the man’s entire FAMILY lived in the trench.
My guess is that his wage was a small fraction of what an American mason would be paid. Is his quality of life a twenty-fourth of what we would want for an American worker?
Maybe we could just import a bunch of workers from China to build the subway. Have them live in the tunnel as they are constructing it. We killed fewer than 200 Chinese workers building the cross-continental railroad, certainly we can do far better for a measly subway line.
How much would a Chinese pilot require to fly some of our regional jets? (Although it is hard to believe we are over-paying those pilots, the average Chinese worker would still probably do it for less.)
We’ll believe it when the Chinese equivalent of usaspending.gov opens & they release the death count from construction.
Colin: How much do Chinese regional jet pilots earn? A bit more than U.S. regional jet pilots, because China needs to entice pilots from other countries to supply its rapidly growing airline industry. The market for airline pilots has become global, with similar salaries on every continent.
You believe that the 24X difference in project cost is attributable to labor? The article mentions laborers getting paid $5000 per year, an above-average wage in China if I’m not mistaken. For the difference in cost to be explained by labor, that would mean that we’re paying laborers $120,000 per year, or roughly three times the U.S. median income. We would be taxing minimum wage workers at Walmart to pay government contractor workers 10X the Walmart workers’ salary. If we’re not, in fact, paying $120k/year to the guys carrying bricks here, the difference in cost is more likely attributable to inefficiency (see http://philip.greenspun.com/blog/2008/05/10/beijings-new-airport-terminal/ where it turned out that China built an airport terminal many times the size of Heathrow’s latest, at a tiny fraction of the cost per square foot, in one fifth the calendar time).
You think that American government contracts be awarded according to the lifestyle that we would want for the workers? I want all workers to live in 6,000 square foot McMansions, drive BMW SUVs, and take quarterly trips to Paris to buy their clothing. After all, they are serving the U.S. taxpayer and what nobler cause could there be?
According to http://www.globalsecurity.org/military/world/spending.htm, the US spends about ten times more than China for on military spending. However, if the Chinese are 24 times as efficient, they could actually be ahead of the US in military production.
Phil, I agree that labor doesn’t explain everything, but a 120K cost per worker per year probably isn’t to far off, when you factor in health care and other benefits, and don’t forget the employer portion of SS.
I am sure the cost of land use is a big part, not only is there the right of way, but there is also housing for all the workers. Our expensive housing seriously hurts our economic competitiveness. Unfortunately Washington thinks we should borrow trillions to keep those costs inflated.
Philip, what drives the cost up in the US (and Europe) compared to China (or India) isn’t the salary, the cost of living or even the deficiency of our government. Everything is more expensive in the US is due to “freedom”. The freedom to sue when things go wrong at your workplace, on a public transportation or when a roof top falls on your car and kills your wife; the freedom to own land and know that the government or any other strong entity can’t just take it away from you to build a new Olympic Stadium or whatever social development or improvement deemed by the government; the freedom to walk into a hospital, even when you don’t have insurance and you know you will get the same treatment and coverage as the next guy; the freedom to know that the food you buy is safe and your new born won’t get ill due to scandals; the freedom to speak up against the government, practice your believes and know that you and your family will be safe; the freedom for you and I to write in this blog knowing that the government can’t block it; etc. etc. etc.
Those freedom come with a price. If we are willing to give it up, we too can bring down the cost of building anything at the Chinese price level and even cheaper. The challenge is, finding the right balance so we don’t end up bankrupting ourselves or loosing our freedom.
George: I don’t think that “freedom” fully explains why it took 20 years to build Terminal 5 at Heathrow or 35 years to build Runway 32 at Logan Airport here in Boston. In both cases, the proposed expansion was on land that the airport already owned. Lawsuits from neighbors were involved (not sure what the issues were at Heathrow; in the case of Logan the approach to the runway is over water and departure would be in the opposite direction out to sea so the legal arguments against it defied common sense), but I don’t think that a legal system that delays public projects by decades adds anything to our freedom.
Here in London people are buying plots of land where the proposed 3rd Heathrow runway should be built, and they are parcelling it to other buyers so that when the compulsory sale order comes from the court there will be thousands of people, thousands of court cases and development will crawl. So what? I’d rather walk in the UK than fly in the totalitarian fascist country that the PRC is now.
[edited to concentrate on this interesting real estate deal]
It’s very useful to be able to command where and how things will be done – this is definitely a plus to the Chinese government. They decide to build a new airport or harbor or city – release the edict and everyone has to get up and leave or get killed.
No need for negotiations over land values, ecological-impact studies, or NIMBY-ism. It’s very efficient and definitely helps to keep startup costs down.
By contrast, here in Southern Cal, one loud NIMBY guy and a group of ~100 homeowners has successfully agitated for years and prevented expansion of the 101 Fwy through the San Fernando Valley. Exacerbating traffic on one of the most congested sections of freeway in the world for years and affecting hundreds of millions of commuters. Sad but true.
There has to be a better middle ground.
If you think that’s bad, also here in Los Angeles, we can’t even reopen the Historic Angel’s Flight, a 298 foot long funicular, that used to be a fast way of carrying office workers up Bunker Hill…http://latimesblogs.latimes.com/lanow/2009/02/mechanics-teste.html.
It’s been 8 eight years and this tiny rail line is mired in law suits, cost over runs, changing building codes, commissioned studies, and countless investigations…all for a line that travels less than the length of a football field.
The long-proposed Maglev line between Shanghai and Hangzhou ran into serious opposition from residents along the proposed route: some were unhappy with the proposed compensation, some believing that high magnetic field will hurt their health. The line has been indefinitely shelved because of this. There are many similar cases in recent years.
Last I heard, the Shanghai-Hangzhou maglev was shelved for economic reasons, and the local opposition was simply cited to save face and win PR points. Every successful long-distance HSR project in the world has been built with steel-wheel on steel-rail high-speed technology.
Authoritarianism makes it easier to get projects completed, but by no means is it required. France is blanketed by high-speed rail lines, while the British took ten years just to build a single HSR line from London to the Chunnel. There are structural factors beyond just a liberal/authoritarian political system.
There are several projects involving imported Chinese labor in Africa and the Middle East. There *was* one recent project in Washington, DC that used imported Chinese workers: the new Chinese embassy. But the open-immigration days of the 19th century are long over. Embassies (which are extraterritorial) are just about the only thing that can escape our labor/safety regulations.
boy, why this venom spilling happens whenever China gets mentioned? i am from China, when i talk about things in the US, i don’t scream about millions of dead Iraqis, black slaves, torture facilities set up by cia around the world or school kids get sick from poisoned peanut butter, the list goes on and on. every country has their own dirty laundry, but this right in your face shouting just chocks off any possible real debates. besides, china is far from a prison cell many of you seem quite happy to believe or, may i say, hope for. if you read chinese, you will find out there are thousands of online forums/blogs, people whine about everything imaginable all the time, don’t see anyone get taken out by government, because when you go back to those pages in another month, they are still whining.
Hello everyone! I just found this discuss from Google search. Firstly, I should introduce myself. I’m from Shanghai China, one of the most advanced cities in China. And I’m now living in Canada for over 10 years.
Now today I do want to write something on this topic. Why US and Canada need to spend so much money on construction? I cannot understand. Somebody said, it’s because you much buy land on ground. Ok, let’s assume that you need to build a subway station on every single mile. Then, you spent 3.9 billion and Chinese spent only 0.1 billion and that means you must have a supper station which can cost you 3.8 billion.
Come on, 3.8 billion, I can buy a high building even in NYC. Have you ever heard such a joke? Do you even know simple maths?
Yes, Chinese government has power. But that still doesn’t mean land is free. It is cheap compare to NYC but they are not free. The price of house in Shanghai is NOT too much cheaper than NYC.
Just behind my house, there’s a townhouse building. It has been built over one year, but still not finished. It is totally unbelievable in China. We can build a sky scratch in one year, not just a town home.
Don’t deny your lazy labor work problem please. They are tooooo lazy.
You can work harder. You can only buy “made in US” to protect your jobs. Or you can even immigrant more Chinese labors to let them work for US. But if you did nothing, I believe your country finally will lose the competition.