Low-quality infrastructure investments may cause severe damage to China's economy and that of the globe. According to a study conducted by the Said Business School, more than half of the infrastructure investments made in China destroyed economic value rather than creating it.

The study analyzed 95 large Chinese road and rail projects and 806 transport projects. It concluded that the country needs to focus on high-quality infrastructure investments. It also found that actual infrastructure construction costs in China exceed estimated costs by 30.6 percent. This rate is in line with global trends. About 75 percent of the transport projects in China also went over their budgets.

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Infrastructure investments have been a major catalyst for economic growth in China. The country is increasing its focus on infrastructure investments after facing a slowdown in the manufacturing sector. However, the study says that such investments have added to the already alarming debt load.  

The Financial Times reported that many economists have refuted the results of the study. Louis Kuijs, head of Asia economics at Oxford Economics, said that most of China's infrastructure investments have made a positive contribution to the economy. However, he said that China now experiences a diminishing rate of return from new investments. 

According to Phys, the study claimed that road and rail projects in China take 4.3 years to build. This rate is better than the 6.9 years it takes in other nations.

The study attributes China's economic growth to its institutional reforms and economic liberalization.

Tagschina, infrastructure, Said Business School