ABSTRACT
This chapter investigates China’s infrastructure development by sector and identifies the main stakeholders and methods of financing. It provides summary statistics of the investment size and capacity and analyzes the economic consequence of infrastructure. As the economic reform commenced in the early 1980s, the Chinese government started to upgrade her highway network, but it was not until 1988 that China had her first expressway built, which is 20.4 kilometers from Shanghai to Jiading. Perhaps the single theory that receives most attention in the study of transport infrastructure is the new economic geography, which models regions separate in space as components of an integrated economic system that are inter-connected by costly bilateral trade. Any change in transport infrastructure not only changes the trade cost between directly connected regions, but also changes the “demand capacity” and “supply capacity” of all inter-connected regions, generating system-wide perturbations.
