August 19, 2022

High-Speed Rail Poised to Transform China

Complaints include the system’s high costs and fares, the quality of construction and an allegation of self-dealing by a rail minister who was fired this year on grounds of corruption.

But often overlooked amid all the controversy are the very real economic benefits that the world’s most advanced fast-rail system is bringing to China, and the competitive challenges it poses for the United States and Europe.

Just as building the interstate highway system in the United States a half-century ago made modern commerce more feasible on a national scale, China’s ambitious rail rollout is helping to integrate the economy of this sprawling, populous nation. In China’s case, it is doing so on a much faster construction timetable and at significantly higher travel speeds than anything envisioned by the United States in the 1950s.

Work crews of as many as 100,000 people per line have built about half of the 16,000-kilometer, or 10,000-mile, network in just six years, in many cases ahead of schedule, including the Beijing-to-Shanghai line, which was originally planned to open next year. The entire system is still on course to be completed by 2020.

For the United States and Europe, the implications go beyond marveling at the pace of Communist-style civil engineering. As trains traveling 320 kilometers per hour link cities and provinces that were previously as much as 24 hours by road or rail from the entrepreneurial seacoast, China’s manufacturing might and global-export machine are likely to grow more powerful.

Zhen Qinan, a founder of the stock exchange in the coastal city of Shenzhen and the recently retired chief executive of ZK Energy, a wind turbine producer in Changsha, said that high-speed trains were making it more convenient to base businesses here in Hunan Province — a populous region that has long provided labor to the factories of the east, but whose mountain ranges have tended to isolate it from the economic mainstream.

Mr. Zhen ticked off Hunan’s economic attributes: “Land is much cheaper. Electricity is cheaper. Labor is cheaper.”

Throughout China, real estate prices and investments have risen sharply in the more than 200 inland cities that have already been connected by high-speed lines in the past three years. Businesses are flocking to these cities, now just a few hours by bullet train from China’s busiest and most international metropolises.

Meanwhile, a shift in passenger traffic to the new high-speed rail routes has freed up congested older rail lines for freight. That has allowed coal mines and shippers to switch to cheaper rail transport from costly trucks for heavy cargos.

Because of this shift, plus the further construction of freight rail lines, the tonnage hauled by China’s rail system increased in 2010 by an amount equaling the entire freight carried last year by the combined rail systems of Britain, France, Germany and Poland, according to the World Bank.

The bullet train bonanza, and the competitive challenge it poses for the West, is only likely to increase with the opening of the 1,320-kilometer Beijing-to-Shanghai line, which will create a business corridor between China’s two most dynamic cities. The Ministry of Railways plans 90 bullet trains a day in each direction.

The trains will barrel along at speeds of more than 300 kilometers per hour initially, with plans to accelerate to about 350 kilometers per hour by the summer of 2012 if the first year of operation goes smoothly.

Even at the initial speeds, the trains will take less than five hours to travel between Beijing and Shanghai. That is roughly comparable to the distance between New York and Atlanta, which takes nearly 18 hours on an Amtrak train.

China’s huge investment in high-speed rail may be instructive for the United States, whether for proponents of U.S. rail investments or critics who consider bullet trains a boondoggle.

Article source: http://www.nytimes.com/2011/06/23/business/global/23rail.html?partner=rss&emc=rss

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