When infrastructure becomes the fourth mountain, the pressure on ordinary people may have just begun

Luo sir's words

2024-05-14 17:43Posted in Sichuan Workplace Creators

In addition to housing, education, and medical care, there is now an additional infrastructure.

With more than 40 years of history of market economic development, the most impressive may be infrastructure; In the past 40 years, the mainland's infrastructure construction has advanced by leaps and bounds, and there are significant differences between the airports and high-speed railways in developed countries in Europe and the United States.

But today, as the mainland's infrastructure continues to saturate, and as the infrastructure grows over time, it faces more and more problems.

Just recently, the mainland made a rare big increase in fares on four major high-speed rail lines, one of the most far-reaching moves the mainland has taken to deal with rising infrastructure costs and heavy debt since construction began nearly 20 years ago.

But for infrastructure with people's livelihood attributes, price increases are far from so simple.

Until now, it is easy for ordinary people to feel the convenience brought by infrastructure.

Hundreds of kilometers away, with the blessing of high-speed rail, ordinary people only need more than an hour to arrive, which is several times faster than driving, with the blessing of infrastructure, the mainland's logistics costs have also become unprecedentedly convenient, which indirectly promotes the popularization of e-commerce in the mainland.

But when we become more and more accustomed to enjoying convenient and cheap infrastructure, we often ignore the cost behind the infrastructure, which is extremely high, and now, this cost will be more reflected in ourselves.

The rise in high-speed rail ticket prices is just one part of the drive in the rise in public service prices, with water and gas bills also starting to rise in some cities earlier this year.

The rise in infrastructure may only be a reversion to the mean, but for ordinary people, it means that the cost of living has risen sharply.

In the past, public services on the mainland were heavily subsidized by local governments, so we could enjoy higher infrastructure services at cheap prices, but as local debts intensified and the real estate recession led to a decline in land sales income, infrastructure growth became a last resort.

For local governments, there may not be enough money and energy to subsidize infrastructure and drive down prices.

Raising prices at this time can be a good way to avoid the losses of some large state-owned enterprises, make consumers pay more, and also help offset the risk of deflation, which is the risk of deflation, which is the price decline that is common as the mainland's economic growth slows.

Since 2021, the mainland has significantly increased the electricity bills of many factories, but residential customers can still enjoy lower subsidized electricity rates.

But subsidized electricity bills are often also unsustainable.

Today, factory electricity bills are already being paid at market prices, and in the future, with the pressure on local finances, residential electricity will also return to the market era.

However, the biggest pressure to raise infrastructure prices still comes from people's livelihood and the increase in people's living costs.

It is undeniable that a large proportion of today's young people in mainland China already have tendencies similar to Japan's "low-desire society", and they adhere to the principle of not getting married, not having children, and not buying a house, so as to avoid falling under the weight of the three mountains.

But infrastructure is different, water, electricity, gas and even the price of high-speed rail, are closely related to people but inseparable from things, once the price of these infrastructure rises, even for a young man with low desire, it means that he has to pay a higher price for it.

This was certainly not a problem in the past, when the economy was growing at a high rate, as personal incomes were also increasing significantly; But today, with the slowdown in macroeconomic growth, the stagnation or even decline of personal income, the price of infrastructure is rising at the moment, and people's lives will only be more stressed.

The high-speed rail is a symbol of the mainland's infrastructure construction capacity; It began to be built before consumers could demand it, and the construction of high-speed rail often requires huge loans, with loans of up to 6.13 trillion yuan from the national railway group that operates the railway network alone.

Under such high debt, the price of high-speed rail has risen, and it has become a road that has to be taken.

This year, the mainland's finance ministry has ordered more than a dozen of the country's most indebted provinces to reduce infrastructure spending in exchange for debt relief. The focus of the mainland's future economic growth has also begun to shift from infrastructure-driven and real estate investment to technology manufacturing and exports, but technology manufacturing and exports are facing greater pressure from Europe and the United States.

At this moment, the price increase of infrastructure has also become one of the few options.

Since the 2008 $4 trillion economic stimulus package, the mainland has opened 45,000 kilometers of high-speed rail lines, connecting every major city and hundreds of small towns, and in terms of scale, these 45,000 kilometers of high-speed rail lines are enough to cross the continental United States from New York to Los Angeles more than 10 times.

The advantages of high-speed rail are obvious, the speed is extremely fast, it can reach 300 kilometers to 380 kilometers per hour, and because the track is straight, the train can also run at high speed without slowing down.

At the same time, high-speed rail is expensive.

To cover the high cost of construction, high-speed rail is often initially owned by provincial and municipal joint ventures that once helped pay for construction, but the ability to subsidize high-speed rail has become weaker as local debt pressures have weakened.

In addition, as the construction of high-speed rail expires, some old lines have begun to require more maintenance, which were first built around 2008, and now almost two decades later, maintenance costs have begun to gradually rise.

In a statement, the rail system explained the reasons for the increase in fares on some lines this month, saying that "there have been significant changes in operating costs such as line maintenance, vehicle purchases, equipment renewals, and labor and employment."

The rise in infrastructure must have the greatest impact on ordinary people.

Because of the slowdown in macroeconomic growth in the past few years, the income of ordinary people has hardly increased significantly, but once the price of infrastructure related to people's livelihood rises, people's living costs will only be greater.

Especially when you add up the cost of housing, education, and medical care.

Peak fares will all rise on peak routes from Hangzhou to Shanghai, Changsha and Ningbo, as well as from Wuhan to Guangzhou, and many cities are relatively affluent areas near the Yangtze River and its tributaries in the central part of the mainland.

The increase in the price of high-speed rail in these areas is often less impactful, but for office workers who go north to work, the increase in high-speed rail price still poses a certain challenge to them.

In addition to the smaller increase on the route between Hangzhou and Changsha, first- and second-class tickets will increase by nearly 20% during peak hours, and luxury VIP business class tickets will also increase by 39%.

This is not the first time that the price of high-speed rail has risen, but the reason why this price increase has received special attention may be because of the extraordinarily large increase.

As early as the end of 2020, the railway system increased the second-class ticket price of the country's most trafficked line from Beijing to Shanghai by 8%, and just a year later, by another 10%, and this time the increase of nearly 20% at one time has naturally attracted special attention.

Although the mainland's high-speed rail is still very cheap compared to Europe and the United States, the income in Europe and the United States is usually higher than ours, more than three times that of us, which also leads to the increase in the price of high-speed rail, which often means a higher cost of living for ordinary people.

After the increase in high-speed rail fares, the highest ticket price for a second-class high-speed rail seat from Wuhan to Guangzhou soon reached 553 yuan, a journey of nearly 1,000 kilometers that takes less than four hours, and the first-class ticket price is 885 yuan, the same as the economy class of American trains, but the GDP per capita of the United States is almost seven times that of us.

In first-tier cities such as Beijing and Shanghai, many people are discouraged by high housing prices and choose to rent a house in neighboring cities, and there are no longer a few people who work in Beijing and Shanghai, and they take high-speed rail to and from the two cities every day.

But now, the increase in the price of high-speed rail may cause them to make a different decision.

Furthermore, as the price of water and electricity in some cities begins to rise, and the pressure of local debt begins to be evenly distributed to everyone and every household, people may also make more rational consumption.

In other words, if the local debt pressure cannot be filled by the high-income group, then the role of stimulating consumption may be extremely limited.

Under the increasing hard costs, the space left for consumption by ordinary families will naturally begin to collapse, which is not good news for everyone.

But on the other hand, the rise in infrastructure prices is more like a helpless move; "Infrastructure madness" is the same as "the world's factory", behind every title, there is a price and cost.

In the past, infrastructure drove economic growth and more jobs, but with the saturation of infrastructure and the rise in maintenance costs, it is still us who will pay in the end.

Of course, it is not only the infrastructure that is aging, but also the population, which also means that when we are preparing to bear the cost of providing for the elderly in an aging society, we also need to pay for the increasingly expensive infrastructure to maintain.

In the post-growth era, cost will be a very important factor.

end.

Author: Luo sir, concerned about the economy, society and everything in our world, curious about the logic behind the development of things, optimistic pessimist.

View original image 552K

• 

• 

•