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Chinese Academy of Sciences: High-Speed Rail Construction Unsustainable
Nov 09, 2010 eChinacities.comThe Chinese Academy of Sciences (CAS) reported to the State Council recently, urging the large-scale high-speed railway construction projects in China to be re-evaluated. The CAS worries that China may not be able to afford such a large-scale construction of high-speed rail, and such a large scale high-speed rail network may not be practical.
Wuhan – Guangzhou High-speed Train
High-speed rail train runs at over 250 km per hour, about twice the normal speed of a regular train. Under the current plan, the central government has approved to build, by 2020, 16,000 km of high speed rail providing access to about 90% of the Chinese population. Some local media have reported recently that the recently enabled Wuhan - Guangzhou high-speed rail is currently running an average daily attendance of less than half capacity, while the newly opened Shanghai-Hangzhou high-speed rail attendance is even lower. The main reason for the high-speed rail low attendance is that fares are too high; the high-speed railway ticket prices are usually double or higher than normal train fares.
The report submitted by the Chinese Academy of Sciences said China's high-speed rail construction has caused debt that has already reached unsustainable levels; particularly since the end of 2008, the government introduced a stimulus plan to fight the global economic crisis and the size of local government borrowing is already very high
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There certainly are arguments that more rail is a bad idea (eg. http://mpettis.com/2010/09/you-aint-seen-nothing-yet/ points to that rail spending is financed by debt which ultimately comes from consumers, while China’s economy needs consumers to be wealthier, not poorer).
But on the other hand, infrastructure like this is built to be used for decades. Just because it isnt being used *now* doesnt mean it is a bad idea, and if it is functioning as a stimulus, then it can be a bad investment on its own merits but still a good idea overall.
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Obviously the value is determined over its life cycle, but
(A) Given the time-value of money, it is more expensive to build things today than it is tomorrow, so what's the rush?
(B) If it is not in use today, why do they expect it to grow suddenly in the future? Present usage is often the best estimate of future usage, unless they are anticipating some major changes.
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The media reported complaints are ignorant of basic network economics. Of course the Wuhan-Guangzhou line isn’t utilizing its full capacity. It is the first section of a larger networktrains from those other lines will eventually flow over this capacity. This is like saying a line from Washington to Philadelphia is a bad idea because it hadnt yet opened all the way to New York.
Like most public infrastructure this investment wont yield full returns for decades. Those returns will include the avoidance of the cost and environmental impacts of alternate highway construction.
Yes HS rail fares are high by Chinese standards, but the alternate cheap/slow trains are still available, and HS travel hugely stimulates trade and travel among a big portion of society that cant readily afford airfares.
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Still, even if China were to halt all construction now, they’d be lightyears ahead of the USA in a transport network that is more secure than ours (no reliance on foreign oil).
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Definitely good for business on the corridor to Suzhou. The train has allowed me to work in Suzhou two days a week, and my staff find the commute is only a little bit longer than the commute withing Shanghai.
Door to door commute in Shanghai 45-55 minutes.
Door to door commute from Shanghai to Suzhou office 75 minutes.
This has allowed me to increase my client base significantly.
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So Bernard you could pay more but then other people will not.
Do you want a TGV only for you? So why other taxpayers should pay for it?
For the other commenters it seems that analysis is not only limited to this line.
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It is not just for me. There are many who benefit.
I see many Chinese businessmen, and the list of benefits below will fit their business as well as mine.
My clients benefit. They are doing more business, and earning more money.
My clients also travel to Shanghai saving time=money. All of my clients take on new staff as the business sector has grown.
I benefit, my staff benefit. They do more business, earn better bonuses. The money is being spent in the Chinese economy. I have also employed two new staff.
Suzhou and Kunshan have also benefited from the increase in business and the new train is likely to attract more foreign and domestic investment.
Many Shanghai companies are relocating, mostly due to improved transport infrastructure, this includes the train.
Try thinking a little bit wider than your own horizons.
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A nation’s potential to prosper sometimes is down to the public infrastructures. If the public infrastructure is good, then the masses will be happy. And happy masses bring stability, and with stability, economy will grow.
Public infrastructure is always an investment that took a long time for a decent return. But we must know that any public infrastructure that benefits the masses, can transform the landscape of a nations economy.
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Railway system in China is always the most important transportion method since the normal salary earning people would and only can use frequently. But yes, the large-scaled construction definitely need the authorities to make the detailed research and Feasibility report.
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It won’t be necessary to build high spped on a large scale.Several main tracks between large cites are enough.Because most people taking a train can not afford the high cost,even if they can cover the cost,they think it doesnt deserve it to pay more than double the money for the saved few hours.In addition,constructing such a large project will cost a lot of money,thus funds invested into education agriculture would have to be deceased.In conclusion,building a large project merely to prove to the world the power and strength of our country is not a wise decision.Think twice!
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I have to say that you could say the same for Chinese people buying cars. But with 24% year on year growth... well you can work it out.
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were we can read the full report of the CAS? because its conclusions mentioned in this article ,without numbers cannot permit any evaluation about the real projects situation ,and in the both cases- if my memory it’s rigth -we read that information in a report about high velocity train, produced by a IRDB director or consultant, giving techinical suport for HVT projects in China,and the IRDB give financial suport for projects in China
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It's beyond the limit of the ordinary people. so while the construction is going on, few people are afford to be served. Welcome to my http://blog.rudylee.net I have post a blog about the waste of the high speed rail way. However it was forced to deleted by some guy.
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Expenditure on infrastructure is a National asset. Newly opened high speed corridors running at 1/2 its capacity is pretty good. No railway in the world runs to its full capacity round the year, eccept during school holidays, vacation or special occassion like expo.
China has too few holidays, almost no paid leave (except for state owned companies) and all depend on few National holidays, when these trains can't coup up with the demand. Its time now, that people start having leishure so that they can make use of these high speed corridors.
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Nice to be visiting your blog again, it has been months for me. Well this article that I've been waited for so long.
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