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The Cost Of Driving in China

April 20th, 2010

China may be the largest auto market in the world, but its expressways are empty. The reason is that they are privatized, and it costs drivers an average of 12 cents/mile to use them. When gas runs $3/gallon in the U.S., it’s close to $4 in China; expensive tolls can more than double the figure to an effective cost of $8/gallon+. While not having to suffer traffic congestion and pollution sounds attractive, there is underutilization on the expressways, and the economic cost of long-distance travel poses a challenge to a nation trying to convince its people to move away from dense cities on the coast and into the interior.¬†China will invest $300 billion in high-speed rail, and it will spend another $62 billion to construct¬†100 new airports. Many have suggested these are the signs of progress. I’ve hinted in an article for Forbes that these investments may instead hint at China’s inability to get people riding down the highway.

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