Infrastructure Investment

Morgan Stanley predicts that emerging economies will spend $22 trillion on infrastructure between now and 2018. Australia's Macquarie Bank puts the number at $30 trillion through 2030. Last year, Brazil announced a four-year plan to spend $300 billion to modernize its infrastructure. The Indian government has penciled in $500 billion in infrastructure projects in its latest five-year plan. Russia now has plans to construct 39,000 miles of new roads and 5,300 miles of railways by 2015, including an eight-lane expressway that will link St. Petersburg to Helsinki and Moscow by 2015. And this investment boom isn't limited to emerging economies. A casual drive through the Northeast corridor of the United States will confirm that much of the United States' roads, airports, bridges and tunnels are in sore need of upgrading. The American Society of Civil Engineers estimated that $1.6 trillion would be required during a five-year period to bring U.S. infrastructure back into shape.

The China Factor
Unsurprisingly, the biggest player in the infrastructure boom is China. Four out of 10 dollars spent on infrastructure during the next 10 years will be spent by Asia's emerging economic giant. China's commitment to infrastructure has been relentless. Between 2001 and the end of 2005, it spent more on roads and railways than it did in the previous 50 years combined. By the end of 2007, China had built some 33,500 miles of roads, thereby achieving in 17 years wh
at the West took 40 years to accomplish. And its remarkable pace is continuing. Between 2006 and 2010, China will invest $200 billion in railways alone, four times more than in the previous five years.

Bullet trains are another high profile endeavor. Costing $30 billion, the Beijing-Shanghai high-speed line is the most expensive project in China's railway history. An 800-mile bullet train between Beijing and Shanghai -- the equivalent of going from New York to Chicago -- will reduce the travel time between the two cities to a mere five hours. But the ultimate trophy is yet to come. A plan published by the Ministry of Communications in 2004 mentions a highway from Beijing to Taipei, Taiwan, to be completed by 2030. The technical challenges of crossing the 94-mile Taiwan Strait aside, the document does not suggest how to tackle the even bigger political problem of reaching an agreement with renegade nation Taiwan. But no one can say the world wasn't warned.