China, although a rising economic power, is still considered a developing country. In order to achieve the same level of development as Western countries have achieved, China has funneled significant investment into its infrastructure - so much money that its budget for infrastructure surpasses that of the United States and Europe, combined.
With low interest rates and room for government spending, China is taking advantage of the opportunity to build up its infrastructure. For China and India, 8.6% and 4.9%, respectively, of their annual GDPs are generated from infrastructure spending. These numbers are well above the world average of 3.5% and are much higher than US numbers. Despite the fact that the US’s GDP composes a much larger percentage of the world’s GDP than that of China and India, only 2.5% of US GDP goes towards infrastructure spending.
In the late 90s and early 2000s, China upgraded its telecommunication and power systems, which benefited over 100 million Chinese citizens, according to an article published by McKinsey. Since then, China has only become more ambitious with its future plans. By implementing these plans, China is creating many more job opportunities for its citizens and is making transport much more efficient. In the United States, the Obama Administration has expressed plans for spending money on infrastructure in order to help the American economy through job creation and government spending, but Americans have not yet seen these plans executed.
Many economists believe that, by 2030, China will surpass the United States as an economic superpower. By spending more in infrastructure, China is creating more jobs for its citizens, which increases the spending power of Chinese consumers. While it still has far to go, China is quickly catching up to the Western world.