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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Joe Stocks who wrote (89856)	12/23/2007 8:09:16 PM
From: Oblomov	Read Replies (1) of 110194

You're right - labor is a lot cheaper, and there are few environmental impact or noise studies that need to be conducted (which is what makes building an airport in the US a 20-year endeavor). US GDP per capita is about $45K, or about 10x what it is in China. I'm sure that some of the airports under construction are large airports, comparable to an international airport in the US... there are at least 200 cities in China with metro area population greater than 1MM, compared with 50 in the US. On the other hand, the lower per capita income means that a smaller proportion of the population is capable of affording air travel. The airports, much like skyscrapers in Shanghai, seem to be built based on forecasts of future demand rather than an immediate economic need. This is laudable in a sense- in the US we build new roads or airports only long after they are needed, while in the quasi-planned economy of China, infrastructure is built in reasonable anticipation of demand. The problem is that reasonable forecasts are notoriously wrong at the turning points, which is one reason that there are recessions.

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