Download Positive Study on Transport Infrastructure Construction and County

Positive Study on Transport Infrastructure Construction and County
Economic Development in Wengniute1
YIN Peipei, LIU Yingqi
School of Economics and Management, Beijing Jiaotong University, Beijing, P.R.China, 100044
[email protected]
Abstract: This paper discusses the importance of transport infrastructure construction to the
development of county economic development, especially the significant influence to the rural economy.
Using the data from Wengniute, this paper then does some empirical study to further investigate which
aspects of rural development transport infrastructure construction has the most obvious influence on. At
last, this paper presents some suggestions on transport infrastructure construction according to the
conclusions of empirical study.
Key words: transport infrastructure construction, county economy development, Wengniute
1. Introduction
A common phenomenon often exists in the social economic development: A place’s degree of richness is
closely related to the degree of transport demand satisfaction level of this place. The more the demand is
met, the better the economy develops, and vice versa. The reason for this is that the development of
transportation in this area is directly related to the flow of funds and information, the training of
qualified personnel and the use of high technology. Once the traffic infrastructure is poor, it becomes the
bottleneck of development of local economy. From the perspective of economics, profitability is the aim
of social investment. Sampaio, Neto and Yony Sampaio (2008) discussed the quality and efficiency of
public transport through a DEA analysis, and highlighted the characteristics of the efficient systems. But
according to Word Bank’s study, the commodity index of rural roads is 1, that is to say, rural road is a
kind of public goods, so you can not get profits by investing in rural roads construction. What’s more,
according to the road investment theory (Wengqiang Chen and Yulei Gu, 2007), the time effectiveness
of urban areas is larger than rural areas, and the economic return of investing in urban areas is larger
than rural areas. Therefore, our country’s traffic investment concentrates on cities and towns. The
investment on railway and highway construction is huge, but county and township level roads that
directly improve farmers’ transport conditions are only invested by local governments, apparently in a
weak position. The empirical study done by Yanling Li in 2004 also proves this.
However, as the demand for harmonious society is becoming stronger and stronger, more and more
attention is paid on the constraint of transport infrastructure construction to agriculture development.
Dalkmann et.al 2007 affirmed the important role of transport in the development of rural settlements
and declared that the situation of Chinese villages is often worse because of an insufficient
development of transport. Hao Wu had compared the transport condition with the agriculture
development condition respectively in the east, west and middle part of china, his data proved that
currently the west region is falling behind. And he noted that poverty covered the west region and
poverty here was worst. Another investigation found that in 1994 the poverty rate of village without
roads is 82.7%, 75.5% higher than that of villages with roads .Thus he pointed out the significant
influence of transportation development to agriculture development.
This phenomenon appears in the whole world. United States, European Union have better transport
conditions, their GDP as well as the rate of commercialization of agricultural products is also the
forefront; while many African countries, although richly endowed by nature, do not well developed
（ ）
1
Sponsored by National Social Science Foundation of China (No.07CJY015) and College Students Innovative
Experiment Plan in Beijing Jiaotong University.
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because of the backwardness of transportation.
There are mainly two points of view when it comes to the relationship between transport and economy
development. One considers transport industry the driving force of economy development, transport can
boost economy; the other considers transport industry flexible, and highlights the comply aspect of
transport with economy. Recalling the history of transport and economic development, it can be seen
that when transport adapts to the needs of economic development, it can promote it; when transport
lagging behind, it has certain constraints to economy. At the same time, when the rapid development of
economy brings about a large quantity of high quality transport demand, the economy will
counter-influent the transport, forcing transportation change and develop rapidly to become part of the
economy development process. Therefore, the basic system of modern times no longer allows the
hysteresis of transportation. In particular, different scholars have done their research on the relationship
between agriculture and economy development: Peigang Zhang (1984) came up with a point that
infrastructure and basic industry were the vanguard of industrialization through researching the
interdependence relationship between agriculture and industry, indirectly showed the effect of transport
on agricultural modernization under the assumption of fixed transport technology. Fuping Yang (1996)
and Lingzhong Xiao (1999) researched respectively on the effects that the circulation of agricultural
products made on the commercialization of them and then further on agricultural development and the
objective demand for transport. Chaohe Rong (1991) depicted the stage of agriculture development and
transport development in the book ‘on transportation’; Yiping Zhao (1994) also made some
comprehensive study of China’s transport and rural economy development. All showed the great effect
of transport infrastructure construction on rural development.
2. Text
This paper chooses one special poverty-stricken county in western region---Wengniute and does some
specific studies according to the current situation of local transport development and the existing
problems based on previous studies, in the hope of making practical recommendations and giving some
guidance to the future development of this county.
2.1 The status quo of Wengniute
An American agriculture economic development expert J.W.Mellor divided the development of
agriculture into three stages: traditional agriculture stage, the transformation stage from traditional to
modern agriculture and the modern agriculture stage. Traditional agriculture is characterized by small
scale production, low level of specialization and ambiguity of labor division. The modern agriculture,
however, has large scale production, high level of specialization, clear labor division and high rate of
agricultural products commercialization.
According to the 2006 evaluation report on Chinese county basic economic competitiveness, Wengniute
is the 1135th one, and the level of basic competitiveness is F(in total A-J 10 levels). From the specific
data[2], we can consider Wengniute in a stage of traditional agriculture, but if judging from the existing
pattern of industrial development[3],this county has formed rice, animal products processing, biological
chemical and other competitive industries, the 13 leading enterprises are developing organic, green and
pollution-free agricultural products, and they have already realized the commercialization of agricultural
products through market operating, brand packaging, scale producing and company managing.
Therefore, we can believe that this county is in the transformation stage.
2
The national county average economic scale until 31st,12,2006:average population 45.53 million ,average GDP
3.204billion,average local financial revenue 121million.Wengniute statistics: population:471691,GDP
3.6724billion,local financial revenue 99.04million
3
Liu Yingqi, Wang Yakun, Study on the Selection of Leading Agriculture Industry in Ecologically Deficient and
Developing Counties
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2.2 The status quo of Wengniute transportation
Wengniute is located in the middle of Chifeng City, and among the northern five counties, it is the only
way to Chifeng. So it is in an very important traffic position. But due to some geographical reasons,
Wengniute is the only county that mainly depends on highway and has no railway. A "three vertical and
four horizontal" traffic network has formed in this region: State Road 305 line, 306 line and Province
Road 205 line go from south to north; Junior line, Shengdeng line, Red line and Taiyang line go from
east to west. Although compared to the past, the number has greatly improved, the levels remain to be
enhanced: for there are only 334Km asphalt roads, 12.32%of all highway mileages. Until today there are
still 168Km county roads to be rebuilt and 19 Sumu without asphalt roads. Therefore the existing road
level can not meet the increasing traffic demand. Some roads would be blocked when it rains because of
the lack of bridges. Therefore, this region's transport infrastructure is very poor and needs to be
improved. Especially in the east region, the road construction is almost empty. So farming and animal
husbandry products are facing serious transport problems. As the transport infrastructure in Wengniute
can not support the establishment of agricultural and livestock products distribution center, the majority
of the towns there are in a state of isolated island and unable to meet the demand of tourism. But as a
national level poverty-stricken county, the funds for highway constructing is very limited due to the
limits of local financial conditions. In the 2005 highway constructing project, only 45 million was
invested, leaving a funding gap of 14.893million.
2.3 Empirical Analysis
2.3.1 Program design
This paper does empirical analysis basing on 2000—2006 data from Wengniute. Highway mileage is the
dependent variable, the GDP of the primary, secondary and tertiary industry, volume of goods
transported, volume of goods turnover, volume of passenger transported and volume of passenger
turnover are independent variables. Then judge respectively each independent variable the linear
relationship intensity with the dependent variable. The coefficients obtained are called linear correlation
coefficient or Pearson's correlation coefficient. The formula and primary data are as follows:
r=
n∑ xy − ∑ x∑ y
n ∑ x 2 − (∑ x ) * n∑ y 2 − (∑ y )
2
2
Table 1 variables from 1999--2006
Volume of
Volume of
Highway Primary Secondary Tertiary
goods
goods
year
mileage industry
industry
industry
transported
turnover
1999
1204
72000
30237
29158
63
5700
2000
1384
67880
34610
32390
73.4
6579
2001
1384
74340
34920
35830
77.1
6855.4
2002
1384
84952
41152
42516
79.9
7125
2003
1384
95194
40599
51371
84.81
7553.21
2004
2710
113573
63316
68262
91.12
7997.16
2005
3279
138550
78173
80083
95.2
8477
2006
3323
147800
126721
92719
101
9020
Data sources: annually statistics yearbook from Wengniute
Volume of
passenger
transported
98
101.5
106.4
110
111.21
125.23
132
140
Volume of
passenger
turnover
4900
5373
6395.5
6723
6707
9329.5
9900
10493
2.3.2 variable explanations:
The GDP of the primary, secondary and tertiary industry is calculated in terns of absolute price;
The volume of goods or passengers transported is the actual quantity of goods or passengers delivered.
They reflect the use of transport industry for the national economy and people's livelihood, so it can be
used to study the scale and speed of transport industry development.
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The volume of goods or passenger turnover is the quantity of goods or passenger delivered multiplied by
relevant transport distances; the unit is ton-km or person-km, it can be used to reflect the total
achievements of transportation.
2.3.3 the results of empirical analysis
Table 2 correlation coefficients between independent and dependent variables
Volume
Volume
Volume
Highway Primary Secondary Tertiary
of goods
of goods of passenger
mileage
industry industry
industry
transported turnover transported
Highway
1.00
0.96
mileage
Data sources: SPSS analysis
0.90
0.96
0.89
0.89
0.96
Volume
of passenger
turnover
0.96
From the analysis results we can see that all |r| is higher than 0.8. Therefore, it is reasonable to judge that
each independent variable is highly correlated with the dependent variable. Since the primary and
tertiary industry has the same correlation coefficient with the highway mileage, so does the volume of
goods transported, the volume of goods turnover and the volume of passengers transported, the volume
of passenger turnover, we choose only one variable on the same relevant level to do multiple regression
analysis, the multiple regression model is as follows:
y = α + ∑ βi * xi + ε
、 、、 、
y represents highway mileage ,x1 x2
x3
x4 represent respectively the primary industry(PI), the
secondary industry(SI) ,the volume of goods transported(VGT) and the volume of passenger
turnover(VPT). The regression results are as follows:
Table 3 regression statistics
Regression statistics
Multiple R
0.982023
R Square
0.964369
Adjusted R Square
0.916861
Standard error
267.8687
observations
8
As the adjusted R is 91.7%, so 91.7% of the highway mileage change could be explained by the multiple
regression equation. So the independent variables are valid ones.
Table 4 analysis of variance
analysis of variance
df
SS
MS
F
Significance F
Regression
analysis
4
5826111
1456528
20.29900569
0.01645505
Residual
3
215261
71753.65
Total
7
6041372
As can be seen from variance analysis, P equals 0.01. So it passes the significant test under the 95% confidence
level, that is to say, the overall regression relationship significant.
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Intercept
PI
SI
VGT
VPT
Table 5 regression coefficient analysis
Standard error t Stat
P-value
1330.97
0.591811 0.59561420
0.01527
0.62707
0.57509147
0.00816
0.382796 0.72738269
29.5361
-1.41196
0.25281342
0.24335
1.95709
0.14526413
Coefficients
787.685605
0.00958066
0.00312523
-41.7037489
0.47625894
Lower 95%
-3448.07135
-0.03904219
-0.02285698
-135.700903
-0.29819095
Upper95%
5023.443
0.058204
0.029107
52.2934
1.250709
The results of regression coefficient analysis indicate that all P values are greater than the given
significant level 0.05, so all independent variables do not pass the test. The main reason is their multiple
collinearity. It can also be seen from the correlation coefficient among the independent variables.
、
Table 6 correlation analysis among the independent variables
HM
PI
SI
VGT
HM
1.00
PI
0.96
1.00
SI
0.90
0.93
1.00
VGT
0.89
0.93
0.86
1.00
VPT
0.96
0.97
0.89
0.96
VPT
1.00
3. Conclusions
Transport infrastructure construction is the vanguard of rural economic development. The requirement
of transferring rural surplus labor, goods and materials has brought new opportunities and challenges to
the development of transport industry. Although the region's transport has had a little development, it
has still caused some restraint to the development of local tourism industry, the universal level of
education and the market process of agriculture and animal husbandry products. So it is an important
factor of the backward of this area’s current economy.
(1) The aspect of three industries’ personal flows : In view of the close relationship of transport industry
with the primary, secondary and tertiary industry, the analysis of employment status quo of three
industries is made. Judging from the employee ratio of the three industries in Wengniute, surplus labor is
mainly absorbed by the primary industry and it is always in a stable state. The percentage is wandering
at 30-60 in recent 30 years. Although the development of the secondary and tertiary industry
employment scale is speeding up in recent years, there is a shortage of the employment absorption
capacity, so it limits the driving force of secondary and tertiary industry to the economic development.
One important reason for this is the poor traffic condition, causing difficulties of labor exporting and
normal labor force flowing. In order to solve the status quo of the abnormal rural employment ratio, let
surplus labor force in rural areas out and raise the value of the rural labor force, it is imperative to
strengthen transportation infrastructure construction.
(2) The aspect of tourism industry:
Khadaroo and Seetanah(2007)found that transport infrastructure is a significant determinant of tourism
inflows into a destination through a gravity framework. As transport is directly related to the volume of
passenger turnover, analysis is made from the aspect of tourism industry. Wengniute is the world-famous
birthplace of "Hongshan culture", and it is enjoying the reputation of "Dragon and Phoenix", the vast
grass, boundless desert, original pinewood and unspoiled folkway are its unique tourism resources,
constituting a unique ethnic custom and desert tourist place, so the tourism industry there has large
development potential. By investing in transport infrastructure construction, making more Chinese or
foreigners visit and consume here, we believe this "number one world Dragon" will definitely take off.
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(3) The aspect of agriculture:
In view of the relationship between the transport industry and the volume of goods transported,
inspection is made from the aspect of agricultural products delivery. Wengniute is the epitome of terrain
in northern China for the diversity, multi-level and echelon of its natural resources. The diversity of
terrain determines different soil types of the whole county, also provides favorable conditions for the
development of the mixture economy of agriculture and animal husbandry. So the agriculture has always
been the main economic structure there. From 1978 to 2003, the GDP of agriculture started from
60.47million yuan to 1.5billion yuan in 25 years, with the average growth rate of 14.49%. The rate still
reached 7.06% after deducting the impact of price index, showing a relatively rapid growth trend.
However, the low degree of modernization, the lack of effective organization, operation model and the
shortage of industrial chain causes the weak driving capacity of agriculture. The deeper reason for it is
that the transport infrastructure construction has not solved the contradiction of agricultural production
and consumption deviation. So although the products are in high quality, the circulation is poor, left
alone realize the reasonable aggregation of production factors and the economy of scale. Due to the
transport difficulties, the original price competitive products lose their advantages because of transport
costs, so transport limits the expansion of market. At the same time, the low revenue of farmers and
herdsmen also directly causes the insufficient demand that further restrain the development of other
industries.
Based on the above constraints and limitations that transport infrastructure has on the development of
local economy, the following proposal are given:
(1) Encourage and support the acceleration of transport construction at the guidance of local government.
Currently the main funds for highway construction are from the country, the county is lack of matched
funds and is reliable on the Ministry of National Communications. This causes a relative shortage of
funds, so the standard of highway construction is low and it seriously constrains the improvement of the
local transport industry. The government should provide local enterprises with more favorable
environment. In this way, the position of government can eventually change from passive to positive,
taking full advantage of the competition between foreign enterprises and choose the most favorable
industry for local economic development, gradually form the cooperation between government and
enterprises in highway construction.
(2) Pay enough attention to road conservation after completion. Due to the special geographical location
of this area, it is very hard to build a road. This area (especially the east) is lack of stones as it locates at
the margin of a desert. Take Chuansha highway as an example, 1 million yuan is needed to construct
only one kilometer. What’s more, it is particularly time consuming, seven years has past before the
construction. However, as the local animal husbandry is relatively developed and many herdsmen
choose to live by the road, cattle act as "on the road police" has become a very common phenomenon.
This not only greatly reduces the safety of drivers (vehicles must give way for cattle, can not hurt their
lives), what is more worrying is no clearance of the emissions from cattle. As cattle’s excrement and
urine is weak acid, the corrosion is very serious and will greatly reduce the life span of the road and
destroy many roads. Based on above considerations, we must strengthen the conservation of roads, and
safeguard the fruits of highway construction. By executing large-scale livestock management, reducing
the occupation and corrosion of them, we thereby effectively improve the life span and efficiency of the
roads.
As this county has already formed an industry scale, we will never tolerate transport to become the
bottleneck of industry development. We should pay attention on the highway level while improving the
accessibility. In addition, we should struggle to achieve sustainable development in transport by
reconciling transport with resources and the environment. Therefore, we should put the development of
local transportation in an important position, learning the principle:’ key in launching, focus on
management, success in quality, improve on technology, long-term in conservation and core in policy’
from Yunnan, starting from solving ‘fund-raising difficulty, quality assurance difficulty and conservation
difficulty’, carrying out practically transportation infrastructure construction in line with local conditions.
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The government should have long-time vision so as to avoid duplication and giving up halfway wasting
funds. At the same time take comprehensive control over both small town construction and poverty
relief. Through raising people's awareness of the importance of traffic, the government can improve the
quality of local roads, truly strengthen the exchange of goods and bring convenience to people's lives.
By making advanced technology go rapidly into the whole county, Wengniute can set a good model for
other west poverty-stricken and ecologically fragile areas to become rich with science and technology.
In this way, we can speed up the pace of common prosperity and realize the harmonious development of
the whole society.
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