Chapter 1 Introduction
1.1 Research background and meaning of the subject
Infrastructure plays great role in modern economy developing process. Without providing better infrastructural conditions to companies there is no possibility to increase economic level of country in general. Infrastructure is necessary asset for all of nations. In case of globalization all world became a global village with different links between countries. Without access to global market the countries developing process is impossible. Therefore cross border infrastructure takes the main place in extension relationships between parties of global village. Good cross border infrastructure is critical for the long term economic development of a country. Key infrastructure assets create additional economic benefits by supporting urbanization and industrial growth, providing better access to adjoining countries and stronger trade links between them and, as a result, mutual development . During bachelor studying we made a careful research of cross border infrastructure between Zabaikalskiy Kray (Russian Federation) and Hulunbeier district of Inner Mongolia Autonomous Region (People‘s Republic of China). Research was based on comparative analyses of four main check points: Zabaikalsk-Manzhouli (railway and road check point), Stary Curuhaituiskiyi-Heishantou road check point, Olochi-Shiwei road check point.
1.2 Theoretical framework
The main purpose of this literature review was to explore the literature related to the infrastructure investment‘s sphere. Part of the purpose of this paper was to gain answers to the research questions posed in the introduction. In order to meet this goal we made analyses of related literature and provide clear picture of the research question. Most of infrastructure projects are implemented by private-public partnership; this project is not an exception. In that case we should evaluate not only economic feasibility of project but also take into consideration other indirect effects. Kolomak (2011) suppose the final decision about investment plan is difficult to make, because there is many kinds of regional and intersectional effects. Transport infrastructure has got carefully analyses in those cases, including not only feasibility analyses, but also impacts of projects which involve transportation. This kind of researches have been published by Gutierrez J.and Garcia Palomares J.(2008), Lopez and Gomez (2008), Moreno (2003) Henckel and Mc Kibbin (2010). All of these researches based on indicators which effect economic growth in regional scale. They show us positive consequences of building public infrastructure under the different conditions. On the other hand, as Monzon shows (2008), the impacts of infrastructure investment are not undertake only by one region, where infrastructure is applied, but also has influence on their neighbor areas by spatial effect, which was described by P. Moran. Spillovers of transport infrastructure are clearly understanding because of transport infrastructure network. In fact, the benefits from improvement of infrastructure in one region are distributed over by network to other regions, in our case to both countries border regions and its neighbors.
Chapter 2 Role of infrastructure investment in modern economy
2.1 Economic aspects of infrastructure investment in national development
There are many publications which analyze the infrastructure and investment separately or together and this paper is not an exception. In order to provide clear understanding of current problem with infrastructure investment, firstly, we need to deal with concept of infrastructure. The first thing which that needs to said is that concept ― Infrastructure is really difficult to define, because of rather wide meaning of this term. Traditionally infrastructure have been considered as complex of different fields, companies and organizations, their main role is to create conditions for effective manufacturing and goods turnover, and at the same time for improving life standard of people. Infrastructure includes roads, transport, communications, water and energy supply and so on. There are three types of national economic infrastructure: Production infrastructure; ? Social infrastructure; Market infrastructure. Production infrastructure is complex of national economic units; the main purpose of their activity is to provide efficient performance of manufacturing process. Production infrastructure has some specific features: from the one side, it guides to maintain manufacture process, from another side; it provides reproductive performance of human recourses.
2.2 Cross border infrastructure and regional economic growth: interdependence and interference
Transport plays very important role in the economy and generates many multiple communications inside the system, generates new processes. Many experts have taken steps to create models, which correctly reproduce the impact of transport to the economy and on the economic system in general. The infrastructure investment should be considering together with many factors, area of country or region, the level of its development and the development of the economy in general, ecology and others. There are many studies which concern of the role of transport in country economy, they are usually distinguished the following aspects. First, the development of the transport system allows justifying the accessibility of various regions of the country and its resources, productive capacity. Not only to justify but also to plan economic activity of the region. Secondly, the development of the transport system allows making conclusions on the spatial development of the country, jobs, tourist facilities, location of trade points. Third, the state should affect the development of the transport system through the implementation of investment in infrastructure, development of public transport, traffic management. Transport infrastructure investments are always perceived as an incentive demand for economic growth and as one of the form of contribution to the economic development of the regions, urban and rural settlements. Investments lead to reduce the transport component in the final price of goods transported between the rural and centre areas, it also plays an important role in reducing economic disparities between regions, increase its the competitive status in terms of accessing to new markets, labor migration, reduce the cost of cargo passing within the framework of external and internal logistics systems. All these points lead to increasing the productivity of region, creation of new competitive advantages.
Chapter 3 Current situation of cross border infrastructure in China and Russia.... 33
3.1 Analyses of border infrastructural strategy of Russian Federation.......... 33
3.2 One belt, one road: the global infrastructural project ..... 41
3.3 Level of infrastructure of Tongjiang-Nizhneleninskoye cross border check point............ 51
Chapter 4 Estimation of direct effect and spillover analyses of Tongjiang Railway Bridge .... 57
4.1 Tongjiang bridge: project description ............ 57
4.2 Evaluating primary effects of Sino-Russian railway bridge construction project on regional development ........... 62
4.3 Assessment of spillover effect of Sino-Russian railway bridge construction project......... 69
Chapter 4 Estimation direct effect and spillover analyses of Tongjiang Railway Bridge
4.1 Tongjiang bridge: project description
In October 2008 the governments of the Russian Federation and People's Republic of China signed an agreement of the joint construction of a railway bridge across the Amur river (Heilongjiang) on the Russian-Chinese border near the Nizhneleninskoye city in the Jewish Autonomous region (Russian Federation) and Tongjiang city of Heilongjiang province (People's Republic of China). The authorities responsible for the construction of a border bridge are: ? Russian side is the government of the Jewish Autonomous region, ? China – the People's government of the city of Tongjiang and the Harbin railway administration. There are only three railways cross border check points on the China-Russian border (4 thousand kilometers): Zabaikalsk – Manzhouli in Zabaykalsky region, Grodekovo – Suifenhe and Makhalino – Hunchun. The Tongjiang railway bridge will allow to increase the efficiency of goods flows. From the Russian side to design the bridge was proposed by Russian construction company "Institute Giprostroymost". The Chinese side on the design of the bridge assigned to the Third design Institute of the Tianjin city (China). The design and construction of the bridge can be attributed to innovative project, regardless of the level of applied technical solutions and implemented inventions. Innovation is not always invention. This is a set of measures aimed at improving the people life standard. The design of the bridge over the border river Amur is associated with innovation: the project will improve life quality of many people living on both sides of the border, provide new opportunities for further development. In the documentation there is an innovative technical solution – the unique bridge required a unique approach in construction sphere.
In order to conclude our work we want to provide main objectives of each part of research, which are presented. Transport system is very important factor in workers concentration, which leads to making efficient centre of productivity. Concentrations of economic activities lead to higher productivity of the local territory. And one of the results can be better investment climate, because transport is potential factor for attracting private investment and creating jobs. Infrastructure projects are one of the most risky ways of investing, especially in cross border infrastructure projects. Risks can be concerned with lack of jurisdiction and higher requirements for coordination. There are also many components such as changes in legal, policy and economic environment, currency risk and others. Russia and China still have many institutional problems of public private partnership, not sufficient elaboration of legislation system, lack of PPP realization experience, unfavourable investment climate, especially on those infrastructure objects which are located rather far from country centre. In the last part of second chapter we have suggested some ideas in order to improve the conditions to attract private sector in financing.
(1) During research process we have discovered that public private partnership will be successful in the project of cross border Railway Bridge. The primary effect includes indexes, which explains aggregate social-economical influence. We were not able to estimate financial feasibility for private investors, but for government part, the project can be defined as feasible. Social effect is positive, the project will create new jobs, it will influence on the region‘s development in general. As for budget efficiency, the governmental income of the custom tariffs of the exporting and importing goods is significant in comparison to present period. Higher budget efficiency will influence on the development of the country in its turn. The time and transportation costs savings are also one of the main positive effect of bridge construction.
(2) We should mention the spatial spillover effect of the project. Data refer to the 7 regions: four regions of Russia and three regions of China. Value added as variables are obtained from "Annual statistic report of Russian region‘s economy development" and from Heilongjiang, Jilin provinces and Inner Mongolia statistical bureau. All variables are expressed during time period of 2010-2015. According to the Moran Index, we can see the negative spatial correlation between three regions of Russia and three regions of China. The dependence in case of international trade between regions is significant, according to the topic of our research we can make conclusion that the realization of Railway bridge construction and increasing turnover of Birobidjan region and Heilongjiang province will lead to decreasing in some way turnover of its neighboring regions, which will suffer from international trade competition. The one region will not get influence – Blagoveshensk region, due to its location and its international trade ability.
The reference (omitted)