Poor materials can cause problems: The collapse of school buildings in the wake of the 2008 Wenchuan earthquake was due in part to the use of low-quality cement, resulting in so-called tofu buildings. “When cement is mixed inadequately or when other materials are mixed in, it’s not very strong, so any major storm or stress on a building could make it fall down,” says Francis Cheung, author of brokerage firm CLSA’s 2012 report, China’s Infrastructure Bubble. In 2011 the government issued guidelines on materials. “There is a movement toward compliance with international building codes and standards,” says MIT’s Hammer. “But implementation and oversight remain extremely variable.”
Cutting corners won’t be a sound long-term economic strategy for China if its buildings, bridges, and roads degrade rapidly and require fairly frequent replacement. Says Patrick Chovanec, an associate professor at Tsinghua University’s School of Economics and Management: “If you have an asset that lasts for 20 or 30 years instead of twice as long, it has a much shorter earning life before you have to refurbish or tear it down.” Robert Blohm, an economist and consultant for Keen Resources Asia in Beijing, says China could get “stuck”: “Will China still be able to pay for another round of infrastructure development—or will its cities become landscapes of dilapidated buildings?” he asks.
For now, the cash spigot is open. In early September, China announced plans to build more than 1,200 miles of roads, nine sewage-treatment plants, five ports, and 25 subway and intercity rail projects. “In an economic slowdown, the government has to take some countercyclical measures,” Xu Lin, head of the planning department at the National Development and Reform Commissions, told reporters.
The bottom line: Chinese buildings last 25 to 30 years, while U.S. commercial buildings are expected to stand for 70 to 75 years.