High-Speed Rail in China: On the Wrong Track?

The Economist questions whether China’s massive expansion of high-speed rail is the best answer to pressures on its transport system:

Detractors complain that high-speed rail is too expensive for the Zhang in the street. Migrant labourers, 230m of whom are expected to make the journey home during Spring Festival, are not in enough of a hurry to pay a premium for speed, they argue. (Or as Patrick Chovanec of Tsinghua University puts it with a dose of economese, “The bulk of the long-distance passenger traffic, especially during the peak holiday periods, is migrant workers for whom the opportunity cost of time is relatively low.”) While some travellers are having such a hard time getting tickets home this holiday season that they have unveiled their underpants in protest, it is reported that on one line $352 luxury sleeper tickets are going begging.

This mismatch raises questions about the $300 billion being thrown at high-speed rail this decade. Many newly added lines are making hefty losses and many are thought to be operating at under half capacity. The Chinese Academy of Sciences, an influential official think-tank, seems to be in the sceptics’ corner: fretting about unsustainable levels of debt, it was reported in November to have recommended the government reconsider its plans. Chinese leaders were said to have ordered a review, and construction of a Maglev line between Shanghai and Hangzhou has since been reported “shelved”.

Some economists make even more dismal arguments. Mr Chovanec attacks one of the main legs of the economic case for high-speed rail in China, that transporting passengers thus would free up track desperately needed for shifting coal. Much of China’s fuel travels by road: a 62-mile traffic jam outside Beijing lasting 10 days last August was only the most visible sign. But if fast trains are out of reach for the masses, there will be little or no relief for either rail or road networks. Critics say the proliferation of expensive trains has pushed poorer travellers back onto the roads, clogging them with 70,000 more buses this Spring Festival, although hundreds of extra trains have also been laid on. Improving China’s languishing logistics network for freight would be a better use of the cash, Mr Chovanec posits.

The article cites other, less direct benefits, however, from exports to national prestige. Another article in the newspaper last month described China’s backing of rail expansion across South-East Asia, noting that “Empire-builders love railways”:

THE rapid expansion of its high-speed railways has got China plenty of attention. Yet ambitions do not stop at the border. On its southern flank China is renewing a push to lay tracks to mainland South-East Asia. The region’s leaders have dreamed since the 1990s of seamless rail travel between Singapore and Kunming, capital of the south-western Chinese province of Yunnan. South-East Asia’s existing network of railways is creaking, patchy and underfunded. Most goods move about the region by lorry and ship. But that creates choke points while running up fuel bills. An integrated rail system could be just the ticket.

Enter China, chequebook in hand. It has recently signed agreements to build new lines in Laos and Thailand, while it extends its network from Kunming to the China-Laos border. These lines are meant to be ready by 2015. The benefits may be huge. Most countries along the route have already hitched their wagons to China’s outsize economy and are eager for more trade. China’s free-trade agreement with the Association of South-East Asian Nations (ASEAN), which took effect a year ago, has cut tariffs on most traded goods. The region still has natural resources, which China is keen to strip.

See also: Rail Chaos as Millions of Chinese Travellers Head for Home – Audio Slideshow