| Summary: | Chinese official plans for the country include more and better infrastructure for
which it cannot afford to pay the total cost. China expects foreign investors to provide 20%
of the funds needed for this purpose. However, the government and foreign investors do
not always have compatible goals or expectations and it appears that actual investment in
infrastructure projects will fall short of what is needed. The paper identifies a tension that
exists between China's 'development' perspective and the foreign investor's 'efficiency'
perspective and attempts to describe what actually happens in the process surrounding the
'making' of an infrastructure project. It also suggests that unless this tension is resolved,
China's infrastructure needs will not be met and its economic growth may suffer.
The paper distills the nature and characteristics of each perspective from a review in
Chapter I of a number of theories concerning the free market, law and economics, and
economic development. Using data gleaned from locally accessible printed materials,
online databases, and other media, the paper presents case studies of a number of
infrastructure projects in Chapter II. In Chapter in, the efficiency and development
perspectives are tested in the case study examples by examining three aspects o f
infrastructure projects of concern to both China and foreign investors: rate of return,
control, and risk. The paper goes on to identify where and how a balance was found, or not
found, between the perspectives, leading to the success or failure of the project.
Finally, in Chapter IV, the paper summarizes some of the primary obstacles to
foreign investment in infrastructure as well as some of the techniques that have been
successful in overcoming them. It also advances the proposition that the tension between
efficiency and development evidences a fundamental conflict of norms that will not be
resolved until the two sides are able to reach some mutuality of understanding combined
with a commonality o f purpose, something that will require efficiency-driven foreign
investors to reassess not only their goals and expectations, but also their role in the global
community. === Law, Peter A. Allard School of === Graduate
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