Yesterday, I posted a graph of the relative size of the US Interstate and Chinese Expressway systems, and pointed out that they are now of roughly equal size. Commenter Joel noted, based on personal experience, that the Chinese system is currently comparatively empty. Statistics on the size of the two vehicle fleets bear this out. The graph above is based on FHWA data (via the Transportation Energy Data Book), and the Chinese NBS Table 16-25, and includes both trucks and passenger vehicles for both countries.
The US fleet is still five times the size of the Chinese fleet. However, over the last decade, the average growth rate of the Chinese fleet has been about 23%/year. The pink line above shows an extrapolation at the same rate, which will result in the Chinese fleet reaching the size of the US fleet sometime later this decade. So those new expressways may not remain empty for too long.
You might argue that growth is bound to slow down in the future. You might be right, too, but there's certainly no sign of that so far. Here's the year-on-year growth rates in the two fleets:
Since the population of China is more than four times larger than that of the US, the number of vehicles per person will still be far lower at the point where the fleets are of equal size. So, if resources were no constraint, we might expect China to continue growing its vehicle fleet far beyond that. Indeed, these statistics should reinforce my critique of the Eichengreen paper arguing that China will slow down by 2015 because it was approaching developed country levels of productivity. With something like 1/7 of the number of vehicles per capita of the US in 2015, that seems unlikely.
However, I think the strains on the global oil delivery system due to China trying to put in place a whole new US sized vehicle fleet in the space of the decade 2010-2020 are likely to be very profound, and I expect it to cause serious disruptions in the global economy.
Fed chairman Bernanke recently said:
Although the recent increase in inflation is a concern, the appropriate diagnosis and policy response depend on whether the rise in inflation is likely to persist. So far at least, there is not much evidence that inflation is becoming broad-based or ingrained in our economy; indeed, increases in the price of a single product--gasoline--account for the bulk of the recent increase in consumer price inflation. Of course, gasoline prices are exceptionally important for both family finances and the broader economy; but the fact that gasoline price increases alone account for so much of the overall increase in inflation suggests that developments in the global market for crude oil and related products, as well as in other commodities markets, are the principal factors behind the recent movements in inflation, rather than factors specific to the U.S. economy. An important implication is that if the prices of energy and other commodities stabilize in ranges near current levels, as futures markets and many forecasters predict, the upward impetus to overall price inflation will wane and the recent increase in inflation will prove transitory. Indeed, the declines in many commodity prices seen over the past few weeks may be an indication that such moderation is occurring.I have no idea how to look at Chinese statistics and be so sanguine about the future of gasoline prices.