外媒中国相关-How Chinas can-do attitude on canals opens the door to white elephants

https://www.scmp.com/economy/global-economy/article/3279772/how-chinas-can-do-attitude-canals-opens-door-white-elephants?utm_source=rss_feed

This is the second story in a two-part series about China’s increasing interest in canals, both at home and abroad, and what their construction will mean for economic growth and transport routes. You can read part one .

In recent weeks, China has been awash with headlines about how it has waded into a “grand canal era”. But a closer look at canal projects across the country tells a more winding and impactful story.

Having already completed a comprehensive network of high-speed railways that service most cities with at least 500,000 people, as well as expressways that connect almost every town, China is poised to see a flood of infrastructure projects comprising canals that link all waterways in the country, according to the prevailing narrative.

Clues of what’s to come can be seen in projects on the ground and in local government documents. In the southern Guangxi Zhuang autonomous region, near the border with Vietnam, construction on the 134.2km (83.4-mile) Pinglu Canal is in full swing, at an estimated cost of more than 70 billion yuan (US$9.93 billion). And in Anhui province, the Jianghuai Canal, built as part of a massive 100-billion-yuan water-diversion project, started accommodating ships in 2022.

Meanwhile, proposals have been floated in the government plans of three inland provinces to spend more than 545 billion yuan on canals, and local-level delegates have repeatedly pitched such plans to the country’s top legislature.

With the world’s second-largest economy enduring a prolonged stretch of slow growth, mainly resulting from a crippling property crisis, massive investment in infrastructure is once again being served up as a panacea. From 2008-09, the bulk of a 4-trillion-yuan stimulus package mostly went to infrastructure projects as a means to shield the country from the spillover effects of the global financial crisis.

With other transport links saturated, canals arose as an option for some inland local government authorities. They tout the benefits that artificial waterways would bring, such as cheaper transport costs, while aligning such projects with broad national-level plans, from a unified national market to the Belt and Road Initiative.

But as authorities’ attention is focused so intently on critical cash injections, short-term economic vitality and shoring up political legacies, some analysts warn that a nationwide canal frenzy could result in multiple white elephant projects. Questions have swirled around their cost-effectiveness and their potential impact on the environment and society, especially in the face of a staggering rise in extreme weather events.

“Relying on macro investing to boost the entire economy – I don’t think it’s necessarily wrong. It depends on when, and in which sector, the investment is injected,” said James Wang Jixian, research director of the Bay Area Hong Kong Centre.

“Canal construction is definitely the wrong sector,” said Wang, who is also the former head of the Department of Geography at the University of Hong Kong.

As the world’s first civilisation to use canals to facilitate transport, China’s first success was the 36.4km Lingqu, whose construction was ordered by first emperor Qin Shi Huang in 214BC to conquer southern tribes and expand the imperial territory, connecting the tributaries of the Yangtze and Pearl rivers - the country’s two largest rivers by volume.

Construction on what would become the 1,800km Grand Canal – the Unesco World Heritage site built to link east China’s business hub of Hangzhou and the capital city of Beijing – was said to have begun in the 5th century BC and completed during the Yuan dynasty (1279-1368). It was the world’s largest civil-engineering project before the Industrial Revolution, and part of the waterway is still in use for shipping today.

Now, the central province of Hunan is proposing a modern version of the Lingqu that also links the Yangtze and Pearl rivers, at a projected cost of more than 150 billion yuan. The new Hunan-Guangxi Canal would further connect with the Pinglu Canal that has been under construction for two years and will ultimately flow to the South China Sea through the southern Beibu Gulf, according to the plan.

Meanwhile, Hunan’s neighbour province to the east, Jiangxi, has proposed spending 320 billion yuan on a canal that would run through Jiangxi and extend into Zhejiang and Guangdong provinces, surpassing the Grand Canal to become the world’s longest at 1,988km.

Both proposed canals have been dubbed a “project of the century”, making the leap from local concepts to state-led explorations, as both are undergoing feasibility studies led by China’s Ministry of Transport.

In an opinion document issued by the ministry in June, provinces were urged to “accelerate the planning and construction of national high-level waterways”, with pointed instructions to “guide and deepen the preliminary research and argumentation” of those two major projects.

In local planning, however, striving to begin construction within a year or two is an unspoken common goal. For projects that come with massive investments and will have profound and lasting impacts, support from the central government is indispensable, given the sheer size of the debts facing local governments.

At last year’s Two Sessions - the annual plenary sessions of the National People’s Congress and of the Chinese People’s Political Consultative Conference - the Hunan delegation submitted a proposal calling for the Hunan-Guangxi Canal to be incorporated into China’s 14th five-year plan (2021-25) and for construction to begin as soon as possible.

The proposal, which has not been accepted, said that the canal would help Hunan “strengthen transport connections with the Beibu Gulf, Guangdong, Hong Kong, Macau, and the [Association of Southeast Asian Nations] region”, and better integrate the region into a “new western land-sea corridor” - a trade and logistics passage in China’s western hinterland being jointly developed by Beijing and Singapore as part of the Belt and Road Initiative.

The canal is the “first choice for reducing logistics costs” for Hunan and “an opportunity it must seize”, said Lu Yi, a professor with the School of Traffic and Transport Engineering at the Changsha University of Science & Technology.

“Water transport and logistics costs have the strongest negative correlation,” Lu wrote in an article published by the Hunan Daily in April, adding that, for the landlocked province of Hunan, “the most prominent bottleneck in developing industries is that it is far from the sea and has a long delivery time, which directly leads to high transport costs”.

The same logic is being applied in the parallel Jiangxi-proposed canal projects that would surpass the Grand Canal’s length. The latest proposed version consists of a 1,228km channel linking Jiangxi and Guangdong and a 760km waterway connecting Zhejiang and Jiangxi in the north.

The two canals would effectively elevate the regional advantage of Jiangxi and promote the economic openness of the inland province, according to the proposal.

But the biggest challenge facing the two proposals lies in a shared geographical barrier - the Nanling Mountains, a major range in southern China that separates the Pearl River basin from the Yangtze valley.

Lu Dadao, a prominent economic geographer affiliated with the Institute of Geographical Sciences and Natural Resources Research at the Chinese Academy of Sciences, said that blindly building such canals equates to zuonie, or “committing a sin”, for the country’s current and future generations.

“For the few people shouting loudly about the two canals, they don’t know: by digging such canals, what [goods] will be shipped? What is the significance? To cross the Nanling’s watershed, the terrain is complex – how enormous will the project be?” he wrote in an opinion piece in August.

“The two provinces of Hunan and Jiangxi – both hinterlands of Yangtze River Delta and Pearl River Delta – have powerful general-speed railways, high-speed railways and expressway networks leading to the above two urban agglomerations,” Lu said. “So, where are the problems with domestic and foreign passenger and freight transport?”

Compared with other modes of transport, canals require more time and money to build, there is less flexibility in where exactly they can be built, and the environmental impact is considerably greater. Thus, most canals constructed around the world have eventually become supplanted by railways and road networks, said Wang from the Bay Area Hong Kong Centre.

Notable exceptions are the Suez and Panama canals, which have thrived and been expanded, as they are both significant maritime shortcuts. The former shortens the journey from Asia to Europe by seven to 10 days, while the latter shortens the voyage between the east and west coasts of the United States by about 8,000 nautical miles (15,000km).

“Does China have an extremely special geographical environment similar to the Suez Canal and the Panama Canal? The answer is no,” Wang said.

As long as China can improve the shipping conditions of existing waterways and better integrate them with railway and expressway networks, that would be sufficient to meet the demands of the country’s economic and social development in the long run, he contends.

And with necessary funding inevitably coming from the central government, it is possible that cash-starved local governments may learn from each other by using canal construction as the excuse to get more money, he said.

“In other words,” he explained, “local governments could end up taking money from the central government and spending it on things that they shouldn’t.”

The Pinglu Canal seems to be the model others may want to follow. Launched in 2022 and expected to be completed by 2026, the canal project is said to shorten the route between inland Guangxi and the sea by up to 560km and facilitate trade with Southeast Asia.

Although the construction is halfway through, doubts have never faded about the project’s real cost-effectiveness.

Wang, who recently visited the construction site, said it is still unclear what cargo would be shipped through the canal instead of existing land routes.

The Port of Beibu Gulf already has a mature sea-rail intermodal train network that connects major cities and industrial centres in Guangxi and Southwest China - part of the “new western land-sea corridor”.

Meanwhile, most cargo shipped out of Guangxi through existing water courses are construction raw materials, which are intended for the Pearl River Delta rather than overseas destinations.

Still, a trade-oriented solution - such as creating an international wholesale market by the water - might offer a possible lifeline, as the canal is at least connected to the sea, Wang said.

Ideas surrounding canal construction have also surfaced in other provinces. In early June, Hubei governor Wang Zhonglin said the province intended to accelerate plans for the proposed Jinghan Canal - an estimated 74.8-billion-yuan undertaking that would cut 236km off the distance of traversing the Yangtze River by avoiding a sinuous middle region.

First put forth in 2015 as a solution to shipping obstructions along the Yangtze, the idea has yet to become a state-back plan.

Replying to a delegate proposal from the National People’s Congress in 2021, the transport ministry called the proposed Jinghan Canal “a complex systematic project” that would have a profound impact on the regional economy and society, on land space, and on the comprehensive utilisation of water resources and industrial layout.

“It is necessary to have large-scale protection instead of large-scale development as the overall direction, with ecological priorities and green development as the guide,” the ministry said while calling for more “in-depth research to fully demonstrate the necessity and feasibility of [the Jinghan Canal’s] construction”.

But that has not stopped Hubei from persisting in its proposals for the project, going as far as saying it would even help the fish.

Huang Yan, a Hubei delegate and president of China Three Gorges University, said during the Two Sessions this year: “We can build a canal so boats and fish can flow through their [separate] channels.”

“It is also a kind of protection for fish,” Huang said of the Jinghan Canal. “I think it is a big ecological project.”