DP15372 China's Dazzling Transport-infrastructure Growth: Measurement and Effects

Author(s): Peter Egger, Nicole Loumeau, Gabriel Loumeau
Publication Date: October 2020
Keyword(s): General-equilibrium models, migration, regional economics, structural estimation, Transport Infrastructure, Transportation problem
JEL(s): F14, R13, R41
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=15372

We document an unprecedented change in the size and the quality of China's transport-infrastructure network between 2000 and 2013. This documentation is based on hand-collected and digitized data on roads and railways. The changes are summarized and portrayed as shortest-possible transport times of people and goods between 330 prefectures of mainland China. A quantitative model of China's prefectures and a Rest of the World, featuring both goods trade and migration, suggests that the long-run consequences of the transport-infrastructure changes induce regional convergence of lagging-behind prefectures in terms of population density and, to a lesser extent, in terms of real per-capita income. Not only changes in highway and high-speed-railway networks but also ones in lower-level road and railway networks are quantitatively important. Key drivers behind the effects are the facilitation of goods transport as well as technology diffusion, while the reduction of mobility costs and the diffusion of amenities appear less important.