DALLAS — Both countries would benefit economically if China can take advantage of increasing opportunities to invest in United States infrastructure projects, the U.S. Chamber said in a report issued Wednesday.
The U.S. is poised to undertake the most significant expansion and modernization of its energy, transportation, and water infrastructure since the 1950s, requiring an estimated capital investment of some $8.26 trillion through 2030, according to the report.
“Unlike previous infrastructure booms, this new period is taking place in the context of significant pressure on federal, state, and local budgets, suggesting that substantial private capital will be necessary to finance the new infrastructure investments,” the report said.
The $8.26 trillion estimate includes $4.64 trillion for energy infrastructure, which is mostly private But the mostly public sectors will require investments of $2.94 trillion of transportation needs and $608 billion of water projects.
“In reality, a much higher amount of investment will likely be necessary,” the report said.
Road and bridge capacity projects account for more than half of the $163 billion in annual transportation investments over the period. The average annual water infrastructure investment of almost $34 billion includes $18.5 billion a year for drinking water projects and $15.2 billion for wastewater.
The report, “From International to Interstates: Assessing the Opportunity for Chinese Investment in U.S. Infrastructure,” also considers the complexities and pitfalls of infrastructure investing.
As the United States’ second-largest trading partner, the report said, China is well positioned to participate in U.S. infrastructure expansion and modernization.
“The pressing need for resources to modernize U.S. infrastructure is creating new opportunities for Chinese investors to act as providers of capital, goods, and services in areas such as civil engineering, architecture, construction, and contract and life-cycle management,” the Chamber said.
“Chinese participation in U.S. infrastructure would enable the United States to leverage Chinese capital, industrial capacity, and infrastructure experiences, while allowing China to help support and capitalize on the coming wave of U.S. infrastructure redevelopment,” Chamber president and chief executive officer Thomas J. Donohue said, as the report was released.
“Two-way infrastructure investment has emerged as one of the most promising opportunities to spur economic growth and job creation in both the United States and China,” he said.
The infrastructure funding could include direct loans to projects, purchase of debt instruments, or participation in public-private partnerships.
Established legal and regulatory frameworks make transportation public-private partnerships more suitable than in the other sectors, the report said, but water infrastructure could also be funded through P3 arrangements.
The United States infrastructure sector can provide Chinese investors with stable, long-term investments and a diversified portfolio, the report said.
“If Chinese participation realizes a fraction of its potential, the infrastructure sector will serve as an important area for bridge building—both literal and figurative—between the two nations,” it said.
There are significant challenges facing Chinese investors in U.S. infrastructure, Donahue said. Making the most of the opportunities will require careful navigation of the legal, regulatory, and political landscape in the United States, he said.
“The infrastructure investment opportunities available to Chinese businesses are significant, but achieving them will likely be a complex undertaking,” Donahue said.
