Ditchmen • NUCA of Florida Ditchmen • August 2016 | Page 11

China Spends More on Infrastructure
Than the U.S. and Europe Combined
by Peter Coy
via Bloomberg.com

Drones are taking off as
a Despite a crying need
for better infrastructure,
investment in it has fallen
in 10 major economies,
including the U.S., since the
financial crisis, according
to a new study by the
McKinsey Global Institute.
Meanwhile, China is still
going gangbusters on
roads, bridges, sewers, and
everything else that makes
a country run.
“China spends more on
economic infrastructure
annually than North
America and Western
Europe combined,”
according to the report

published on Wednesday.
Economists around the
world have been arguing
that now is a great time
to invest in infrastructure
because interest rates
are super-low and the
global economy could
use the spending jolt. “Is
anyone proud of Kennedy
airport?” Harvard University
economist Lawrence
Summers likes to ask.
The MGI report cites
10 countries in which
infrastructure spending
fell as a share of gross
domestic product from
2008 to 2013: the U.S., U.K.,
Italy, Australia, South Korea,
Brazil, India, Russia, Mexico,
and Saudi Arabia. (The
study counts 11 economies,

but that’s because it
lists the European Union
as a separate entity.) In
contrast to the widespread
declines, the institute says,
infrastructure spending
grew as a share of GDP in
Japan, Germany, France,
Canada, Turkey, South
Africa, and China.
The chart below from the
MGI report shows China’s
strength in infrastructure
spending. Its bar is the
highest. The colored slices
represent different kinds
of infrastructure, while the
width of the bars signifies
the size of the economy.
The U.S. bar is wide and
short because it represents
a big economy with low
spending.
• • •

AUGUST 2016 • DITCHMEN

11