From International to Interstates: Assessing the Opportunity for Chinese Participation in U.S. Infrastructure

Tuesday, October 22, 2013 - 8:00pm

Executive Summary

The United States is poised to undertake the most significant expansion and modernization of its infrastructure since the 1950s. 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. This expansion is also taking place in a dramatically changed global economy that boasts new players in global trade and investment. The most important of these new players is China. As the United States’ second-largest goods trading partner—and with a large and growing pool of available capital—China is well positioned to participate in and benefit from U.S. infrastructure expansion and modernization.

Economic, Trade, and Political Factors Drive Compelling Opportunities for Chinese Participation in U.S. Infrastructure

The pressing need for capital to modernize U.S. infrastructure is creating substantial new opportunities for Chinese investors. At a minimum, we estimate that more than $8 trillion in new investment will be needed in U.S. transportation, energy, and wastewater and drinking water (water-related) infrastructure from 2013 through 2030—totaling some $455 billion per year. In reality, a much higher amount of investment will likely be necessary. Investment in energy infrastructure accounts for 57% of the total projected need, followed by 36% for transport and 7% for water-related infrastructure. Making the most of these opportunities will require navigating the legal, regulatory, and political landscape in the United States. This study examines the opportunities for Chinese participation in U.S. infrastructure and provides practical advice for potential participants.