China’s top economic planner has approved a Rmb80bn ($13bn) new airport in Beijing as part of government efforts to boost flagging growth by accelerating construction of state-led infrastructure projects.
The new airport will be located in the far south of the city and is intended to relieve pressure on Beijing’s delay-stricken airport, which was only completed in 2008.
Some commentators have questioned the wisdom of an entirely new airport in such a remote location.
China has built scores of new airports in recent years but barely a quarter of the 200 facilities in operation are making any money, with about 150 surviving on government subsidies, the head of Chinese civil aviation said this month.
The new Beijing airport is just the latest in a string of megaprojects approved in recent months aimed more at boosting construction activity to support sagging growth than providing essential infrastructure.
China’s economy is on track for its worst performance this year since 1990, when the country faced international sanctions following the Tiananmen Square massacre.
Most economists expect the economy to grow by about 7.3 per cent for the full year but Beijing is poised to lower its annual growth target from “around 7.5 per cent” this year to “around 7 per cent” in 2015.
Faced with a sharp slowdown in real estate and huge overcapacity in heavy industries such as steel and cement that feed the construction sector, the government has ramped up infrastructure spending to cushion the slowdown.
In the past month and a half the National Development and Reform Commission, China’s top economic planning agency, has approved more than Rmb1tn in infrastructure projects, including 28 new rail lines.
The NDRC said yesterday it had just approved Rmb112bn of investment in new roads in southern and western China in addition to the new Beijing airport. Investment in infrastructure, especially real estate, has been the key driver of the Chinese economy for decades. But since the global financial crisis this investment has increasingly been financed by government and private sector borrowing and the efficiency and usefulness of much of the infrastructure is questionable.
“Fixed asset investment remains the key to stabilising the world’s second-largest economy at present but its marginal effectiveness is weakening,” said Li Xuesong, deputy director of quantitative and technical economics at the Chinese Academy of Social Sciences, in comments to state media.
Official data show investment in China grew by 15.8 per cent in the first 11 months from the same period a year earlier, the slowest pace in nearly 13 years.
The NDRC said the newly approved Beijing airport would take five years to build and feature four runways and a terminal building covering 700,000 sq m. It will be able to handle 72m passengers, 620,000 planes and 2m tonnes of cargo a year by 2025.
Despite expansion, Beijing’s existing airport has struggled to cope with the growth in passenger and cargo traffic, and last year saw 83.7m passengers pass through, even though the facility was designed to handle only 76m.
Beijing has the world’s busiest airport after Atlanta in the US but consistently rates as the worst airport in the world in terms of delays. In some months, fewer than 20 per cent of flights out of Beijing are able to leave on time, according to data from Flightstats.