China stat of the day: subways


The Times has a good story today about the rush to build new subway systems in China being outpaced by the rush by Chinese to buy automobiles I was struck by this:

The digging in Guangzhou proceeds around the clock, every day. Men like Wang Jiangka, a profusely perspiring engineer in charge of one of the steamy tunnels, endure sweltering temperatures at the tunneling site, where workers put in five 12-hour shifts a week. …

Inexpensive labor — less than $400 a month — and the economies of scale created by completing 20 miles of subway lines a year have driven costs down. 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 city expects to use a single tunneling machine.

It looks like the real race in China is to get their infrastructure built before Baumol’s disease really sets in.

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China stat of the day: subways

  1. The astonishing thing is how much cheaper it is for China to build subway miles.

    I suspect the lower costs are true for construction of any kind in China. Cheap labour and vast economies of scale are a huge competitive advantage. Baumol’s disease may gradually chip away at China’s productivity, but I don’t think that wages are going to shoot up anytime soon, given that China still have vast pool of unproductive agrarian labour (i.e. “peasants”) to draw on.

    • I wonder how many peasants they get per km in China?

      I watched a documentary the other day on the building of the Lions Gate Bridge in Vancouver. In the 1930’s, cost engineers would budget 1 worker death per $1 million. Of course, safety standards have dramatically changed since that time (btw only one worker death on Lions Gate).

      Peasant workers often die in China’s coal mines. And many workers that migrate to the cities to work on construction sites, often are not paid by corrupt builders – which no doubt keeps costs to a minimum.

      One last point. I suspect the infrastructure buried below New York is far, far more extensive, dated, undocumented (and hence more expensive to build) relative to many Chinese cities that are getting complete makeovers/redevelopment.

      • Dot, I’m sure you are right about each of your points. China’s large construction projects are also grave markers for the many workers who died building them. And I’m sure there are non-wage and non-safety factors, like engineering complexity, that drive up the costs in New York.

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