Given the enormous risks they are taking that other investors are not taking, they probably are being compensated fairly. However, because infrastructure cannot be funded competitively at high cost short term basis, this presents an inherent contradiction. China is funding infrastructure at high cost short term while infrastructure can only be realistic on a long term low cost basis.
Funding a bridge is not VC investment.
Better Road Building Paves Way for Energy Savings
Beijing bails them out. Whether it is receiving Venezuelan oil or taking over ports, Chinese firms know they will call Beijing in if the recipient is unable to pay.
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What makes much of the OBOR initiative so pernicious is Beijing trying to bring the ancillary services under Party auspices. For instance, there are already international tribunals where states and investors can resolve disputes and independent parties used to either litigate or create third party like the World Bank oversight to manage ongoing investment issues.
Does China have a comparative advantage in infrastructure construction? No evidence they do. A study from Oxford found that delays and cost over runs were just as likely on Chinese construction projects as they were in other parts of the world. This is an excuse by recipient countries.
- This way to better roads;
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- Huawei Enterprise: Leading New ICT, The Road to Digital Transformation;
- -le bain- (borough of lost boys Book 8)?
- To Make Self-Driving Cars Safe, We Also Need Better Roads and Infrastructure;
If you are undertaking an investment in the hundreds of millions or billions of USD, you need to really do your homework. Any good project will have multiple interested parties from contractors to financing entities.
Why is taking the higher road a good idea?
Institutions like the World Bank, donors like USAID, or even commercial outfits like Goldman Sachs understandably and not without reason get criticised for all the paperwork they do before something gets done. However, there is also a method to the madness. If you are going to build a massive new railroad, you want a couple people checking your assumptions or estimates of how many people will ride the new railroad; you should want public procurement bidding so that you get the lowest cost bid to conduct the work; you should want financial institutions trying to be the providers of capital after reviewing the project planning.
What the countries who take Chinese loans fail to grasp is that not only is China making bad financial risks lending to countries without high quality due diligence, but the countries taking out loans with China are effectively borrowing from the mobs loan shark. So what should countries looking to boost investment do and especially Chinese investment? Let me emphasise, I have nothing specific against Chinese Investors. I understand the reasons for taking Investment, but that does not mean money should be taken with no regard for consequences. Do your due diligence.
Everyone starts projects thinking everything will have profitable from the first day and double digit growth for the next 20 years. The reality is a lot more sobering. Is that possible? Sure almost anything is possible. Is that probable? Use realistic assumptions about ridership or ship docking or whatever else is generating the revenue for the project.
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Solicit other investors and contractors. A high quality project will have no difficulty getting capital whether it is from multilateral institutions like the World Bank or from commercial investors on the capital markets. Then make sure that the bidding for contracting work is transparent and above board.
Lowering the probability of corruption occurs via making the contracting work transparent so that why firms were chosen over other firms is clear and if a higher cost firm was chosen there is a very clear reason for why there was a trade off for higher cost. Given the cost benefits that can be achieved, this is a major factor in project success. Set out and achieve best practices in project finance. There is nothing wrong with looking to increase investment, but there are also very clear best practices. Rather than just arguing money should be accepted with no regard for consequences is grossly negligent at best.
Countries should look to best practices with industry experts from a variety of potential institutions from for profit firms through to multilateral institutions like the World Bank or other development banks. China has no interest in best practices and it is incumbent on recipient countries pushing to make these centrepieces of projects. Protect yourself with papering and dispute settlement. Even in best of circumstances, whether it is Chinese capital or Goldman Sachs, you write the contracts, have the due diligence, accounting, and insurance to reduce the risks associated with large infrastructure projects.
These strings that countries accepting Chinese capital talk gleefully protect the recipient with better litigation or dispute or other risk management venues than trying to beat Beijing in Beijing. I think good deal due diligence, legal representation, transparency, and project management which are skills available to emerging market economies are vital to avoid unnecessary risks whether with China or others. Sunday, September 29, China to strengthen cooperation with Latin America: Wang Yi. Italy willing to work together with China to embrace bright future:….
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Russian lawmaker hails wisdom of Chinese Leadership. China publishes trust Industry Social Responsibility Report. Seven Decades of Communist China. Iranian city of Hamedan hosts meeting on Silk Road. And self-driving systems are not good at detecting and interpreting human cues, such as gestures and eye contact, that facilitate coordination between cars on the road. Processes and environments that are structured well are much easier to automate than those that are not. Automated systems need to collect, classify, and respond to information, and this is easier to do in a clean, unambiguous environment — which is what many driving environments are not.
The designers of self-driving systems simply cannot foresee every possible combination of conditions that will occur on the road. Over time, learning will take place and the number of situations that systems cannot recognize will decrease. In fact, learning is likely to be better in an automated system, because once an incident has occurred and is understood, the fix can be rolled out across all vehicles.
Currently, learning is largely confined to individual drivers, and is not shared across the system as a whole. But novel combinations of conditions will never be eliminated , and sometimes these will have catastrophic consequences — a pattern seen even in the highly disciplined environment of commercial aviation. The problem therefore lies in our period of transition.
For the technology to improve, it must be exposed to real, on-road conditions. The issue here, however, is that humans zone out when their full attention is not needed. As self-driving cars improve and humans intervene less, driver inattention and the associated problem of quickly reengaging to respond become even bigger problems.
And as the technology becomes more sophisticated, the situations where it requires human assistance are likely to be more complex, ambiguous, and difficult to diagnose. In these cases, a startled human has much less chance of responding correctly. Even in the highly sterile environment of an aircraft cockpit, pilots can be caught by surprise and respond incorrectly when automation has ceded control.
Two fatal accidents involving Tesla vehicles operating on their Autopilot systems demonstrate how this space between semi-automated driving and intermittent human control may be the most dangerous place of all. In the Florida crash , the driver of the Tesla had his hands on the steering wheel for only 25 seconds of the 37 minutes in which he operated the vehicle in automated control mode.
This problem has led companies such as Waymo and Ford to advocate for fully autonomous cars that get rid of the need for handovers. But this requires a leap: With no driver as backup, there is a risk that the technology will be catapulted into environments that are beyond its ability to handle.
Self-driving cars also have to navigate an environment that is shared — with pedestrians who sometimes cross the road without looking, cyclists, animals, debris, inanimate objects, and of course whatever elements the weather brings. Road infrastructure, regulations, and driving customs vary from country to country, even city to city, and are overseen by a multiplicity of bodies. Roads are very different from airspace, which is governed by powerful global regulatory bodies, has far less traffic, and has very high licensing standards for pilots.
This means that we need to think not just about the onboard technology but also about the environment in which it is deployed.
Think of radio transmitters replacing traffic lights, higher-capacity mobile and wireless data networks handling both vehicle-to-vehicle and vehicle-to-infrastructure communication, and roadside units providing real-time data on weather, traffic, and other conditions. Common protocols and communications standards will have to be devised and negotiated, as they were with internet communication protocols or the Global System for Mobile Communications GSM for mobile phones.
This transition will take decades, and autonomous vehicles will have to share the roads with human drivers. If rapid, radical change to the driving environment is impractical, what is the alternative? But we may also see dedicated lanes or zones for self-driving vehicles, both to give them a more structured environment while the technology is refined and to protect other road users from their limitations. We can also expect to see self-driving cars deployed first in relatively controlled environments such as theme parks, private campuses, and retirement villages , where speeds are lower and the range of situations the vehicles have to deal with is limited.
Economics, too, will play an important role in where and how self-driving cars begin to operate.