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Opinion: China’s problem with infrastructure spending is not that it is greater than other countries’, but that it comes with low returns and high interest

1 month ago
Amedeo Tumolillo
The average return on assets of state-owned enterprises in infrastructure sectors is around 2 percent, but the average interest rate that state-owned enterprises pay on their debt is around 5 percent," writes Andrew Batson. "It is pretty clear this is not a financially sustainable situation–and note that this is true regardless of what you may think about the broader economic benefits of infrastructure projects, since what matters is the financial returns realized by the project sponsors."
By Amedeo Tumolillo
Amedeo Tumolillo is the editor-in-chief of SupChina and award-winning multimedia journalist. He previously worked at The New York Times and Spectrum. Follow him on Twitter at @hellotumo.