This Staggering Video of Chinese Subway Crowding Will Make You Doubt the Country Suffers From Overinvestment

Commuters wait to enter a subway station during the morning rush hour in Beijing on June 19, 2013. Despite some 5 million private vehicles, public transport faces heavy congestion as most of the city’s 20 million people head to work.

Photo by Ed Jones/AFP/Getty Images

I am by no means a Beijing Metro expert and cannot speak to how representative this is, but check out this mind-blowing video of crowding at one of Beijing’s transfer stations:

But this is the kind of thing that makes me a little bit skeptical of arguments about the Chinese growth slowdown that just point at some macroeconomic aggregates and say “overinvestment!”

Notwithstanding Ordos, Chinese people typically live in small homes. And notwithstanding a white elephant high speed rail line or three, Chinese people do not appear to be systematically over-endowed with transportation infrastructure. Beijing gives every appearance of being a city that could use a lot more transportation infrastructure which in turn would facilitate the construction of even more (and larger) houses rather than a city that desperately needs to rebalance into consumption. That’s not to say consumption is irrelevant. These people clearly need to consume more transportation services. But in order to consume them, someone has to make the investment in capacity first.

And Beijing is one of China’s richest and most advanced cities.

So if the investment cycle has run its course (which from the data it seems to have) that seems to me because the Chinese banking and political system are misdirecting investment rather than that China has “too much investment.” But the Chinese government is planning to build something like 2,400 kilometers of new rail transportation in the Beijing area, so I’d consider that good news.