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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

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."
1 year ago
Amedeo Tumolillo
By Amedeo Tumolillo
Amedeo Tumolillo is an editorial consultant with SupChina and award-winning multimedia journalist. He previously worked at The New York Times and Spectrum. Follow him on Twitter at @hellotumo.
China in 2 minutes a day
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