The Scale of Infrastructure and Economic Growth : A Perspective from Demand Side

This paper analyzes the relationship between the stock of infrastructure and income increases using data from 15 typical countries, including China, and measures the gap between China and upper-middle-income countries using the Euclidean distance. By constructing a domestic infrastructure investment demand model, this paper provides the basis for determining the growth rates for infrastructure investment demand under the given economic development goals and assessing the rationality of such growth rates. The paper finds that, as the per-capita income level increases, the total infrastructure demand rises but different types of infrastructure stock grow at different paces. Using the 2004 domestic infrastructure level as the benchmark for international comparison, we find it imperative for China to further boost resource infrastructure construction in the future and keep resource infrastructure investment growing at an average annual rate of 15%-24%. The infrastructure investment growth rate should be kept above the nominal GDP growth rate