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Chinese firms cautiously eye Trump’s $1t infrastructure plan

2017-03-06

Source: Global Times    Published: 2017-3-6


Chinese infrastructure giants are cautiously eyeing potential opportunities under US President Donald Trump`s proposed $1 trillion infrastructure plan, given the lack of details and the possibility that the plan won`t go into action.


Chinese firms` expertise in infrastructure construction and strong product offerings give them a competitive edge that could help the US, but the US` infrastructure sector is highly restricted to foreign builders, according to Chinese experts.


Trump last week called on Congress to upgrade America`s roads, airports and rail lines by $1 trillion, but without offering details.


Infrastructure behemoths contacted by the Global Times including the State Grid Corp of China, China Railway Construction Corp and bullet train maker CRRC Corp said they don`t have a reaction to Trump`s infrastructure plan. China Road and Bridge Corp and Power Construction Corp of China did not reply to a request for comments as of press time.


These firms have a large overseas presence in Gulf countries, Latin America, Southeast Asia and Africa.


John Ross, a senior fellow from the Chongyang Institute at Renmin University of China, said it is too early to discuss the possibilities of China participating in an infrastructure program which may not occur.


"President Trump has so far said words about an infrastructure program. But words should not be taken for action. There is no proposal for an infrastructure program so far in the US 2017 budget. It is not clear that Congress would pass an infrastructure program if proposed," Ross told the Global Times Monday.


Despite doubts, Sino-US cooperation in infrastructure is seen by some as vital.


Fu Ying, chairperson of the Foreign Affairs Committee of the National People`s Congress of China, sees infrastructure as a great opportunity for US-China cooperation under the new US president, according to media reports in December 2016.


At a US-China forum in New York, Fu said there can be "very good" cooperation between the two countries on infrastructure projects, if the US opens its door for Chinese investment.


Infrastructure expertise


Experts said China, a country blessed with an army of builders whose expertise has been seasoned from a decade-plus of intense country-building, is now eyeing overseas markets and will be a suitable contractor for a US infrastructure overhaul.


As of the end of 2016, China was already an infrastructure superpower, ranking No.1 in the world in terms of mileage for high-speed railways, expressways and urban transit systems, the National Development and Reform Commission, China`s top economic planning agency, reported on Wednesday. The country is also home to seven of the world`s top 10 ports.


An example that illustrates how hard it is to bypass Chinese builders can be seen in the renovation of the New York Verrazano-Narrows Bridge, which connects Brooklyn and Staten Island, in 2013.


Local authorities insisted on spending $34 million to buy specialized steel products from China Railway Shanhaiguan Bridge Group and the Anshan Iron & Steel Group despite an outcry of opposition in the US, citing US steel suppliers` high costs and elusive delivery schedules.


Just as Trump pointed out in his election campaign speeches, US infrastructure is in urgent need of repairing. According to a report by NBC News on Wednesday, one in nine bridges in the US is now structurally deficient.


"If Uncle Trump could manage to produce so much money, it will be super good news for us," a manager from Guangxi-based LiuGong Machinery Co, told the Global Times Monday on condition of anonymity.


Entering the North American market in 2005, LiuGong is the largest Chinese exporter of engineering equipment in this market, having shipped more than 2,000 loaders, excavators and bulldozers.


"If the plan can be carried out, demand for our products will rise following a rise in the construction of roads, railways, and buildings. The CONEXPO 2017 engineering exhibition kicks off on Tuesday in Las Vegas and we are rolling up our sleeves," the LiuGong manager said.


US market access


"If the world`s largest economy sets out to renovate its infrastructure, this will be the world`s largest infrastructure market for the next few years, and there is no way Chinese infrastructure companies are not interested in it," Mei Xinyu, an associate research fellow at the Ministry of Commerce, told the Global Times on Sunday.


"However, the current US infrastructure and engineering market is a closed one with regulation barriers, and the US government has to open its doors to allow the participation of Chinese firms to achieve best results for its infrastructure plan," Mei urged.


"One way to participate under the current legal framework is to buy a US company and uses it as a channel," Mei said. "But in this way the efficiency and cost advantage of Chinese contractors will be compromised."


Keeping its door closed will not bode well for US infrastructure improvement, Mei added.



The author is a senior fellow at Chongyang Institute for Financial Studies, Renmin University of China.


Key Words: infrastructure   Trump   China   US   John Ross  

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