Why Chinese infrastructure tops the United States in GDP generation worldwide

by Carly Midgley | December 16, 2016 11:21 am

According to the 2016 Global Built Asset Performance Index—a study ranking how the respective buildings and infrastructure of 36 countries contribute to their gross domestic products (GDPs)—the United States is second only to China. Built assets comprise $10.4 trillion of China’s infrastructure, whereas they are $5.4 trillion in this country.

China also exceeds the United States in economic wealth generated from built assets. In total, 30 percent of U.S. GDPs’ financial performance can be attributed to built assets. In China, it is 54 percent.

This under-performance is likely caused by a variety of factors, an important one being under-investment in built assets. This low investment creates a corresponding loss of productivity, which in turn inhibits GDPs’ return on assets. For example, Mexico, despite being only fifth in built asset income, receives almost 64 percent of GDP returns because of its high infrastructure spending.

“This drag on the economy caused by years of under-investment can start to turn around with new public and private funding,” says Tom Morgan, North America business advisory leader for Arcadis[1], the consultancy that released the study. “For instance, should the U.S. invest $1 trillion over the next 10 years, it could result in an increase of three percent additional growth in built asset performance over that 10-year period. Without that infusion, the U.S. is forecasted to grow by only one percent of GDP returns. While three percent may appear a small percentage, the impact is huge.”

Morgan also believes asset management can have a significant impact on built asset performance.

“Making more sophisticated use of built assets can also squeeze higher, more sustainable financial performance from existing infrastructure, even if overall funding lags,” he says. “For instance, implementing asset management strategies such as building information modeling, analytics, or visualization technologies can maximize financial performance on existing assets from 15 percent to 20 percent. Examples include Airbnb-type office leasing or using drones for maintenance inspections.”

The Built Asset Performance Index suggests the top 10 countries for built asset income are:

• China, at $10.4 trillion;
• United States, at $5.4 trillion;
• India, at $3.6 trillion;
• Japan, at $1.9 trillion;
• Mexico, at $1.4 trillion;
• Indonesia, at $1.2 trillion;
• Germany, at $1 trillion;
• Brazil, at $966 billion;
• Turkey, at $807 billion; and
• France, at $794 billion.

The full findings can be viewed here[2].

Source URL: https://www.constructionspecifier.com/why-chinese-infrastructure-tops-the-united-states-in-gdp-generation-worldwide/

---