Pro-Poor Urban Development: China and Africa Workshop - "Affordable Housing Finance in Africa", Jiang Wu - Transport Infrustructure & Poverty Reduction, 07/30/2012

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Published on February 6, 2014

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Pro-Poor Urban Development: China and Africa Workshop - "Affordable Housing Finance in Africa", Jiang Wu - Transport Infrustructure & Poverty Reduction, 07/30/2012

http://urban-africa-china.angonet.org/

, Prof. Jianhong Wu Transport Infrastructure Development and Its Role for Poverty Alleviation in China Pro-Poor Urban Development: China and Africa Workshop Nairobi, 30th July – 1 st August 2012

Main Content 1. Outline of Transport Infrastructure Development (TID) in China since 1980 2. The Mechanism between TID, Economic Growth and Poverty Alleviation in General in China 3. International Study Summarized by ADB 4. China Experience and Case Study 5. Identify Opportunity and Future Cooperation African Students in BJTU

1. Outline of Transport Infrastructure Development (TID) in China since 1980

TID, GDP Growth and Poverty Reduction in China Unit Item 1980 1990 2000 2010 Annul increase rate Km Road 888,300 1,028,30 0 1,402,70 0 4,008,20 0 4.98% Km Include : Expressway 0 5,220 16,300 74,100 13.47% Km Railway 49,900 53,400 68,700 91,200 1.96% Km Include : High Speed Line       4,200     Airport   110   175   Billion CNY Total investment of transport infra. 5.776 19.555 293.149 2603.79 21.79% Billion CNY GDP 454.56 1866.78 9921.46 40120.2 15.55% GDP per capita 463 1644 7858 29992 14.40% No. of poverty population(*) 250,000 85,000 92,400 27,000 -6.93% CNY/person per year Thousand Source:1.Statitic Year Book in China 2.Statistic Year Book of Jiaotong and in China *: The criterion of poverty line in China has being subjected to change Statistically Significant?

2. The Relationship between TID, Economic Growth and Poverty Alleviation in China

The Interaction between TID & Poverty Alleviation Transport Infrastructure Investment/Development Bring along the Related Industries Job Creation Drive the Growth of GDP Accelarate the Urbanization Income Increase Education & Social Progress Poverty Alleviation

Average Quota Consumed per 100 milliom CNY Railway Investment Input Item Unit Coefficient Labour Force Working Day (000) 228.6 Steel Ton (000) 3.33 Cement Ton (000) 20 Fuel Ton (000) 0.55 Sand Cube Meter(000) 31.1 Stone Cube Meter(000) 51.6 Equipment CNY(000) 8500

The Spurring Effect Comparison among Rail, Road and Port (per 100 million CNY Investment) Item Rail Road Port Total Output Induced ( 100 mi. ) 3.1937 3.0313 3.0610 Domestic Consumed Value ( 100 mi. ) 2.9620 2.8313 2.8363 Import Induced ( 100 mi. ) 0.2317 0.2000 0.2247 The Value Added Directly Induced ( 100 mi. ) 0.9463 0.9353 0.9297 Personnel Consumption Induced ( 100 mi. ) 0.4350 0.4403 0.4337 Drive the Growth of GDP ( 100 mi. ) 1.3813 1.3757 1.3633 Job Creation ( 10,000 ) 0.2260 0.2457 0.2310

3. International Studies Summarized by ADB

Infrastructure as an Engine of Growth and Poverty Reduction? • • • The impacts of one type of infrastructure (e.g., roads) on economic development and poverty reduction can be significantly enhanced by coordinated investments in complementary infrastructure (e.g., power). And unless the initial infrastructure investments is properly operated, the poverty and development benefits will soon vanish. R. Ahmed and M. Hossain (1990) found that infrastructure development increased agricultural production by 32%, and increased household incomes by 33% in Bangladesh. In addition, they found such investments to be pro-poor since the landless and smallholder farmers garnered a larger share of incomes from better infrastructure. S. Fan (1999) found in India the government expenditures on roads had the largest impact on poverty reduction, as well as having a significant impact on productivity growth.

Impact of Public Investment in Poverty Reduction in China

Infrastructure as an Engine of Growth and Poverty Reduction? • • • At the same time, countries with underdeveloped infrastructure see no statistically significant impact of infrastructure investment on growth. In other words, not only can a lack of infrastructure be an impediment to more investment, but it can also be one of the dimensions of the socalled "poverty trap," There are critical and interlinked infrastructure threshold levels that have to be reached before one can trace the growth and poverty reduction impacts of infrastructure investments. For example, most African countries have yet to reach such infrastructure threshold levels. Institutional capacity constraints and infrastructure market distortions raise those threshold levels even further. Esfahani and Ramirez estimated that had Africa had East Asia’s growth rate in telephones per capita (5% in Africa versus 10% in East Asia) and in electricity generation (2% in Africa versus 6% in East Asia), Africa’s per capita growth rate would have been almost 1% higher.

4. China Experience and Case Study

Case Study 1: Beijing Hong Kong Rail Project Total Length 2283.2 km with construction cost of 40 billion RMB Construction Started in 1992 and completed in 1996 There were 12 nationally designated key poverty counties along the project area

Location and network connectivity of the project

1000 500 0 廊 坊 沧 州 衡 水 邢 台 聊 城 济 宁 菏 泽 濮 阳 商 丘 信 阳 阜 阳 亳 州 黄 冈 九 江 南 昌 吉 安 宜 春 赣 州 河 源 惠 州 Regi onal GDP(100m ) ( CNY) 1500 Regi ons al ong t he Cor r i dor 1995 2005 The Before and After GDP Comparison for the Regions along the Project Area

ith and Without Comparison for the Regional GDP 10000 GDP 8000 6000 4000 2000 0 1988 1990 1992 1994 1996 有铁路时G P(亿元) D 1998 2000 2002 2004 2006 2008 无铁路时G P(亿元) D 2010 时间

The Economic Development Level of Different Regions Vary

Rural Per Capita Income in Different Regions in Project Area Province Regions Rural Per Capita Income in Different Counties (CNY/person) 3482 108.63 1510 3533 133.97 1469 3280 123.28 Provincial Av. 1715 3931 129.21 Liao Cheng 1200 3448 187.33 Provincial Av 1232 2871 133.04 Pu Yang 1114 2472 121.90 Shang Qiu 980 2346 139.39 Xin Yang 1056 2707 156.34 Provincial Av Jiangxi 1669 Xing Tai Henan Growth Rate ( % ) Heng Shui 1537 3265 112.43 Jiu Jiang 1493 3269 118.96 Ji An 1445 3267 126.09 Gan Zhou Shandon g After (2005) Provincial Av. Hebei Before (1995) 1478 2760 86.74 1578 3255 106.27 National Av.

No. of Farmer Labor Working outside and Wages Earned in the Project Area Of which no of Regions Labor force ( 10, working outside 000 ) ( 10000 ) Mobility rate ( % ) Total wage earned ( 10000 CNY ) He Ze 398 130 32.66 - Pu Yang 178 39 21.91 256300 Fu Yang 490 198 40.41 830000 Jiu Jiang 165 61 36.97 450000 Ji An 180 65 36.11 - Gan Zhou 358 119 33.24 - National Av. 4.0

Case Study 2: Shenmu-Yanan Rail Project Total length 386 km with construction cost of $731.78 million Construction was started in 1998 and completed in 2003 The Project is located in northern Shaanxi Province, a poor and landlocked inland with five nationally designated key poverty counties, Hengshan, Mizhi,Suide Zizhou and Qingjian

The Location of Shenmu-Yanan Line

SOCIAL IMPACT AND POVERTY REDUCTION IN THE PROJECT AREA • • • • The project provides safe, low-cost, more comfortable transport facilities to larger markets and improved access to better employment opportunities and social services During 1997 and 2003, per capita incomes in the project area increased by nearly 300% Before the project, the percentage of the population living below the poverty line in the project area was 22%. In 2005, it was 5%,through the creation of more than 370,000 new jobs by the end of 2005. GDP in Shenmu in 2000 was CNY2.3 billion and ranked 67th among all the counties in Western China. In 2005, Shenmu’s GDP reached CNY8 billion, placing its economy fifteenth among all counties in Western China, and first among the counties in Shaanxi Province.

Case Study 3: Yichang-Wanzhou Rail Project Total length 377 km with a construction cost of $4,125 million Construction started in 2004 and completed in 2010 The project traverses eight counties and districts in Hubei Province and Chongqing Municipality that are situated in a mountainous area that is less developed and poor.

SOCIAL IMPACT AND POVERTY REDUCTION IN THE PROJECT AREA • Sustainable Socioeconomic Growth ( Case Study1 YWR.xls) • Increased Rural Income and Poverty Reduction( Case Study1 YWR.xls) • Improved Welfare of Local Communities ( Case Study1 YWR.xls) • Job Creation (Case Study1 YWR.xls) • Safe and Affordable Mobility (Case Study1 YWR.xls) • Increased Rural Development and Reduced Living Costs

The Immigration House of YWR

The Immigration House of YWR

Enshi Railway Station

YWR and Passengers

5. Identify Opportunity and Future Cooperation Is China’s experience transferrable to Africa?

The Cooperation in Transport Infrastructure Development • The Cooperation in Transport Infrastructure Planning • The Support on Transport Infrastructure Investment and Operation from China

Is China’s experience transferrable? • A comparable study is necessary to understand the differences, esp. the Africa contexts and conditions • Lessons that should be learnt from China’s practice, including the over investment on high quality transport infrastructure, such as expressway and HSR

Education is Ranking No.1 for Poverty Reduction

Education is Ranking No.1 for Poverty Reduction • BJTU has long history to welcome the students and researchers from African for transport and communication education and study in the fields of engineering ,sciences , management and economics • The first 2 students from Cameron who studied in BJTU can be traced as early as 1954 • 200 students from Tanzania and Zambia entered BJTU in 1972 according to the Agreement made by the Triple Government for building and operation the Tanzania and Zambia Railways

Education is Ranking No.1 for Poverty Reduction • There have been students from more than 20 Africa countries studied in BJTU since 1978 • Now there are 75 African students in BJTU

Education is Ranking No.1 for Poverty Reduction We are very proud of having more than 1000 Africa alumni who are all over the World!

Education is Ranking No.1 for Poverty Reduction

Education is Ranking No.1 for Poverty Reduction

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