Sources

If You Build It, Will They Fly? The Makings Of A Chinese Airport Bubble

By 2015, Hunan Province alone plans to build seven new airports, joining the existing five that are losing money each year. What's driving the boom.

Gateway to somewhere?
Gateway to somewhere?
Xie Liangbing and Tian Yuan*

CHANGSHA - Hengyan Nanyue Airport will soon become the sixth civilian airport in Hunan Province.

Chen Guaoqiang, a director at Hunan Airport Management Group, announced that by the end of the 12th Five-Year Plan in 2015, Hunan would have built seven new airports with a total investment of 30 billion RMB ($5 billion).

"Hunan will become the province with the most airports in the south-central region," said Chen.

Throughout China, there is a great enthusiasm for regional airport expansion, renovation and new construction. During the 12th Five-Year Plan period (2011-2015), 56 new airports are scheduled to be built, 16 relocated and 91 expanded.

Data from the Civil Aviation Administration of China (CAAC) shows that during this period, China's civil aviation infrastructure construction costs will reach 425 billion Yuan ($69 billion). Some worry much of this investment will go to waste.

Lonely airport


Yongzhou is located 150 kilometers southwest of Hengyang, the second largest city in Hunan Province. In 2001, the city built Lingling Airport – the only civilian airport in southeast Hunan.

On a recent day this month, the airport was very quiet. With no flights during the day, the facility is accustomed to low levels of activity during the day. At about 6 p.m., people start trickling into the airport, but this lasts less than three hours before it empties out again.

The airport currently has flights to Beijing on Mondays, Wednesdays, Fridays and Sundays, and services to Kunming on Tuesdays, Thursdays and Saturdays. According to the latest data released by CAAC in March, Lingling Airport handled 12,056 passengers in 2012, making it the 174th busiest among the 183 airports across China.

Flights to Guangzhou, Shenzhen and Haikou all left from the airport in the past, but they have all ceased due to low passenger numbers. Each year, the airport needs about 10 million Yuan ($1.6 million) in subsidies from the government. But in spite of this, it has plans to expand.

Hengyang speed


There are concerns that passenger numbers at the new Hengyang Nanyue Airport will be similar to those of Lingling Airport.

"There will certainly be three to five years of losses," a source from the industry and transportation division of Hengyang Municipal Development and Reform Commission told Economic Observer. Wang Boxi from Hengyang Nanyue Airport Investment Company believes that government subsidies will be required over the first few years.

However, his boss, Zou Xueming believes that the Hengyang Airport won't be like Lingling Airport: "Lingling Airport is a joint civilian and military airport," he said. "Flights applications are very difficult, but Hengyang Airport will only be a civilian airport."

The rapid pace at which the project went from conception to construction has been dubbed the "Hengyang speed." Location scouting began in 2008. Approval came from the CAAC in 2009 and from the State Council and Central Military Commission in 2010. In 2012, its feasibility report was approved by the National Development and Reform Commission (NDRC) and the project was cleared for construction.

A new terminal going up in Shanghai ( Marc van der Chijs)



Zou Xueming said that construction of the airport is necessary because of the demand brought by Hengyang's rapid economic development and the presence of top international firms like Omron and Foxconn. The airport will also facilitate the shifting economic development model and help promote tourism.

Zou says he's not worried about the airport getting enough visitors. He says Hengyang has 7.9 million people, and even through there are high-speed railways and highways, the airport can serve the roughly 27 million people from surrounding cities. Furthermore, he says Hengyang welcomed over 24 million tourists in 2011.

Total investment in the Nanyue Airport will be 860 million Yuan ($140 million), 270 million ($44 million) of which will be paid by the central government. How much will be invested by the provincial government and the local Hengyang government has not yet been decided. According to statistics, Hengyang had a GDP of 142 billion Yuan ($23 billion) in 2011, with total fiscal revenue reaching 15.3 billion Yuan ($2.5 billion).



Sparking economic growth

Hunan's airports ranked relatively low on a list comparing how many passengers passed through each of China's 183 airports in 2012. Aside from the airport that serves the provincial capital of Changsha, which ranked 12th, the four other airports came in at 52nd, 102nd, 142nd, and 174th respectively.

But by 2015, Hunan plans to build seven new airports. "Hunan has relatively few airports, but the market is huge," says Deng Yuanwu, vice director of the Hunan airport expansion project.

Deng adds that airport construction goes through strict procedures including assessments of resources, population, economic scale, frequency of flights and other strict quantitative indicators.

Local government officials also stress that airport construction is in line with national industrial policy. Hunan's airports average losses of roughly 15 to 16 million Yuan each year (around $2.5 million). "The loss now doesn't mean losses in the future," says Deng. "Many airports have gone through a phase with few visitors that gradually gives way to high traffic."

Deng says that he is more focused on how an airport can help lift the profile of a locality and help drive economic growth. "Foxconn is willing come to Hengyang," says an official from the Hengyang Municipal Development and Reform Commission. "The airport is one of the reasons for this."

Li Xiaojin, a professor at the Economic and Management College of Civil Aviation University of China, told the Economic Observer that airports play a large role in driving industry. The average ratio of economic input into airports to economic output is 1:8 nationwide. Beijing's Capital Airport has a ratio of 1:12. Tianjin and Chengdu's are 1:7 and 1:5 respectively, according to Li. This is why, even when airports operate at a loss, local governments are still anxious to build them.

Li Jiaxiang head of CAAC, told the media at the annual meeting of China's parliament in March that in 2012, the total losses sustained by China's airports amounted to over 2 billion Yuan ($0.3 billion). However, he says they stimulated more than two trillion Yuan ($0.3 trillion) worth of economic activity.

*Translated by Zhu Na

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
Geopolitics

How Thailand's Lèse-Majesté Law Is Used To Stifle All Protest

Once meant to protect the royal family, the century-old law has become a tool for the military-led government in Bangkok to stamp out all dissent. A new report outlines the abuses.

Pro-Democracy protest at The Criminal Court in Bangkok, Thailand

"We need to reform the institution of the monarchy in Thailand. It is the root of the problem." Those words, from Thai student activist Juthatip Sirikan, are a clear expression of the growing youth-led movement that is challenging the legitimacy of the government and demanding deep political changes in the Southeast Asian nation. Yet those very same words could also send Sirikan to jail.

Thailand's Criminal Code 'Lèse-Majesté' Article 112 imposes jail terms for defaming, insulting, or threatening the monarchy, with sentences of three to 15 years. This law has been present in Thai politics since 1908, though applied sparingly, only when direct verbal or written attacks against members of the royal family.


But after the May 2014 military coup d'état, Thailand experienced the first wave of lèse-majesté arrests, prosecutions, and detentions of at least 127 individuals arrested in a much wider interpretation of the law.

The recent report 'Second Wave: The Return of Lèse-Majesté in Thailand', documents how the Thai government has "used and abused Article 112 of the Criminal Code to target pro-democracy activists and protesters in relation to their online political expression and participation in peaceful pro-democracy demonstrations."

Criticism of any 'royal project'

The investigation shows 124 individuals, including at least eight minors, have been charged with lèse-majesté between November 2020 and August 2021. Nineteen of them served jail time. The new wave of charges is cited as a response to the rising pro-democracy protests across Thailand over the past year.

Juthatip Sirikan explains that the law is now being applied in such a broad way that people are not allowed to question government budgets and expenditure if they have any relationship with the royal family, which stifles criticism of the most basic government decision-making since there are an estimated 5,000 ongoing "royal" projects. "Article 112 of lèse-majesté could be the key (factor) in Thailand's political problems" the young activist argues.

In 2020 the Move Forward opposition party questioned royal spending paid by government departments, including nearly 3 billion baht (89,874,174 USD) from the Defense Ministry and Thai police for royal security, and 7 billion baht budgeted for royal development projects, as well as 38 planes and helicopters for the monarchy. Previously, on June 16, 2018, it was revealed that Thailand's Crown Property Bureau transferred its entire portfolio to the new King Maha Vajiralongkorn.

photo of graffiti of 112 crossed out on sidewalk

Protestors In Bangkok Call For Political Prisoner Release

Peerapon Boonyakiat/SOPA Images via ZUMA Wire

Freedom of speech at stake

"Article 112 shuts down all freedom of speech in this country", says Sirikan. "Even the political parties fear to touch the subject, so it blocks most things. This country cannot move anywhere if we still have this law."

The student activist herself was charged with lèse-majesté in September 2020, after simply citing a list of public documents that refer to royal family expenditure. Sirikan comes from a family that has faced the consequences of decades of political repression. Her grandfather, Tiang Sirikhan was a journalist and politician who openly protested against Thailand's involvement in World War II. He was accused of being a Communist and abducted in 1952. According to Sirikhan's family, he was killed by the state.

The new report was conducted by The International Federation for Human Rights (FIDH), Thai Lawyer for Human Rights (TLHR), and Internet Law Reform Dialogue (iLaw). It accuses Thai authorities of an increasingly broad interpretation of Article 112, to the point of "absurdity," including charges against people for criticizing the government's COVID-19 vaccine management, wearing crop tops, insulting the previous monarch, or quoting a United Nations statement about Article 112.

Activist in front of democracy monument in Thailand.

Shift to social media

While in the past the Article was only used against people who spoke about the royals, it's now being used as an alibi for more general political repression — which has also spurred more open campaigning to abolish it. Sirikan recounts recent cases of police charging people for spreading paint near the picture of the king during a protest, or even just for having a picture of the king as phone wallpaper.

The more than a century-old law is now largely playing out online, where much of today's protest takes place in Thailand. Sirikan says people are willing to go further on social media to expose information such as how the king intervenes in politics and the monarchy's accumulation of wealth, information the mainstream media rarely reports on them.

Not surprisingly, however, social media is heavily monitored and the military is involved in Intelligence operations and cyber attacks against human rights defenders and critics of any kind. In October 2020, Twitter took down 926 accounts, linked to the army and the government, which promoted themselves and attacked political opposition, and this June, Google removed two Maps with pictures, names, and addresses, of more than 400 people who were accused of insulting the Thai monarchy. "They are trying to control the internet as well," Sirikan says. "They are trying to censor every content that they find a threat".

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
THE LATEST
FOCUS
TRENDING TOPICS
MOST READ