TRAINS IN CHINA
China has 74,438 kilometers, or 46,235 miles of train track, compared to 486 miles in Ethiopia and 21,160 miles in France. Of this 20,151 kilometers is electrified. China is the world’s most prolific railway builder. It adds between 6,000 kilometers of track a year. As of 2005, 82 percent of China’s railroads were controlled by the central government. The remainder were under the control of local governments. The Chinese train system employs 212,000 people.
Trains are the most popular means of long distance travel in China. They carry twice as much freight and passengers as Russian trains and three times as much as the U.S. trains. China's railways carried 1.36 billion passengers in 2007. The number of train passengers is growing by about 15 percent a year. In 2008, there were 1.46 billion journeys by rail, a 10.9 percent rise from 2007.
Railways are vital to the Chinese economy. China moves 54 percent of domestic trade by train, more than any other major country. Around 2.5 billion tons of freight is carried every year and the rate is growing at a 11 percent rate a year. Most of the coal and oil is moved by train. Iron ore and coal are carried in by train to steel mills and the steel is transported out by train.
China's Railways Ministry controls every stage of train manufacturing, from design through to production and operation. This allows projects to progress faster than in other countries, and prices of train cars are about 20 percent cheaper than elsewhere. If China acquires the bullet train patents, its competitiveness in this market will further increase.
China's railroads are having a hard time keeping up with demands put on it by China’s growing economy (See Coal, Energy). China’s rail density is only 40 percent that of the United States and 11 percent that of Japan. China plans to spend to $205 billion on railroads and build 100,000 kilometers of new track between 2006 and 2010. Government plans call for spending 700 billion yuan ($106 billion) on railway building in 2011.
Book: China’s Great Train by Abraham Lustgarten (Times, 2008) is an interesting accounts of the building of China’s railroads.
Good Websites and Sources: Railways of China www.railwaysofchina.com ; Wikipedia article on Rail Travel in China Wikipedia ; Seat 61 Seat 61 ; China Train Ticket China Train Ticket ; Travel China Guide Travel Guide China Maglev Train in Shanghai Shanghai Maglev official site ; Wikipedia article on th e Shanghai maglev Wikipedia ; New Tibetan Train China Tibetan Train Official website chinatibettrain.com ; Wikipedia article Wikipedia ; Tibet Train Travel tibettraintravel.com ; Links in this Website: NEW TIBETAN TRAIN Factsanddetails.com/China
Links in this Website: TRANSPORTATION IN CHINA Factsanddetails.com/China ; TRAINS IN CHINA Factsanddetails.com/China ; NEW TIBETAN TRAIN Factsanddetails.com/China ; AUTOMOBILES IN CHINA Factsanddetails.com/China ; DRIVING AND OWNING A CAR IN CHINA Factsanddetails.com/China ; ROAD TRAVEL AND BUS ACCIDENTS IN CHINA Factsanddetails.com/China ; AUTOMOBILE INDUSTRY IN CHINA Factsanddetails.com/China ; FOREIGN CAR COMPANIES IN CHINA Factsanddetails.com/China ; AIR TRAVEL IN CHINA Factsanddetails.com/China ; TIBETAN TRANSPORTATION Factsanddetails.com/China
Train History in China
First train in Shanghai in 1876 It is ironic that Chinese labor helped to build the railroads in the United States while foreigners built most of the early railways in China. Foreigners taking over land to build rail lines was a major spark for the Boxer rebellion.
The first railway line built in China connected Shanghai with Woosung. Financed with foreign money and built with raw materials brought in from the hinterlands, the first five miles took ten years to build and the entire line was closed down a few years later after it opened in the 1860s after a riot broke out because a Chinese person was hit by a train. In 1878 the Chinese reopened the line and then dismantled it because the Qing rulers felt it scared the landscape, upset the laws of feng shui and provided easy access for invaders. The rulers purchased all the rails and equipment and had them thrown into the sea.
In 1896, China had only 370 miles of track, compared to 182,000 in the United States. After the end of the Sino-Japanese War in 1894, railroad construction began taking off in China. The Russians built a line across Manchuria, which was later expanded by the Japanese; the French built a line from Vietnam to Kumming; and the Chinese began building their own lines after the formation of the Chinese republic in 1916.
Most of China's railways were built after the Communists came to power in 1949. Before 1935, China had approximately 20,000 kilometers of railways. When the Communists took over in 1949, only about half of these railways were running. Between 1949 and 1964, the Communists constructed 15,000 new kilometers of railways and added around 40,000 kilometers more in the 1970s, 80s and 90s.
In 2005, foreign investors were invited to invest in Chinese railroads for the first time---on six local rail lines in the northern province of Shandong.
Train lines in China
Train Lines in China
There are two main trunk lines. One runs south to north along the east coast between Guangzhou, Beijing and Harbin. The other runs from east to west between Beijing, Zhengzhou, Lanzhou and Urumqi. The three-day journey from Beijing to Urumqi is on the "Iron Rooster," a train immortalized by writer Paul Theroux in book by the same name. This line has now been extended to Kashgar. The railway between Chengdu and Kunming goes through 427 tunnels and crosses 653 bridges as it twists through mountainous Yunnan and Sichuan provinces. The new train in Tibet was achieved with even more impressive engineering feats.
Two of the three main Trans-Siberian routes travel through China to Beijing : 1) the 5½-day, 7,865-kilometer "Trans-Mongolian" route from Moscow to Beijing route which breaks off from the main line past Irktusk and Lake Baikal and passes through Ulan Batar, Mongolia and the Gobi Desert; and 2) the 6½-day, 9001-kilometer "Trans Manchurian" Route, which breaks off the main line at Tarskaya and travels to Beijing via Harbin in Manchuria
The route through Mongolia is the most popular route. People prefer passing through Mongolia, which is more exotic than going through Manchuria. The main problem with theese route is that you have to endure long waits, around 12 or so, at the Chinese-Mongolia border and the Mongolian-Russian border.
Bogey Changes and Steam Engines in China
Poster for steam train factory At the Chinese-Russian border and the Chinese-Mongolian border, the bogies (the undercarriages and wheels of the train cars) are changed to accommodate the train tracks in Russia and Mongolia, which are 10 centimeters wider than the tracks in China and Europe..
The bogey changing is quite interesting. Inside a large shed near the station---with all the passengers still in the train---the carriages are separated and lifted by hydraulic jacks. Work crews of men and women with bolt guns detach the bogies, which are then collectively pushed from underneath the carriages and new bogies with a wider sets wheels are pushed in and attached by the crews.
Why are the Russian gauges wider than other train gauges? According to one story, the wide gauging was designed to thwart military invasions (the idea being that narrow-gauge trains carrying troops and weapons into Russia would be stopped cold at the border). The wide tracks did slow down the Nazi advance in World War II but they were originally chosen over narrow gauges because they are considered safer.
China continued using steam engines---which are not all that different from engines used in the 19th century---until fairly recently. The Datong Locomotive Works was the last factory in the world that made them. What was particularly surprising about the factory is that nothing was automated.
Paul Theroux wrote: “Everything is handmade, hammered out of iron, from the huge boilers to the little brass whistles...It is essentially just a complex of sheds, but one that covers a square mile. Men squat in fireboxes, hunched over blow torches; they crawl in and out of boilers, slam bolts with hammers, drag axles and maneuver giant wheels overhead using pulleys...donkey carts carried heavy iron fittings through the factory, the donkey's sniffing the fires of the forges and looking miserable but resigned.”
The last steam factory was closed in 1989. The first diesels were imported from France and Romania but now China makes its own.
Train Life in China
Soft sleeper Chinese trains are a good introduction to Chinese life. Loudspeakers broadcast staticky news reports from the Peoples Daily and sentimental songs up to 18 hours a day. In their seats, passengers do their washing, party to loud music from cassette players, play cards and mah-jong, and lounge around in their underwear or pajamas, putting on coats when they go to the meal car. In the aisles, they spit, eat noodles, and do tai chi. It is not unusual for a passenger on train to share a four person compartment with a 78-year-old women and a honeymooning couple doing what newlyweds usually do on their first night together in the upper bunk.
At some train stations, hundreds of passengers line up on the platform before boarding. Ten minutes before the train leaves a guard blows a whistle, and the passengers dash to the train, with women and children usually getting the worst seats.
Guangzhou Railway station is arguably the world’s busiest, during the Chinese New Year when millions of migrant workers that work in the Guangzhou-Shenzhen area head home to their villages.
Train Classes in China
Hard sleeper There are four kinds of classes available on Chinese trains: hard seats, soft seats, hard sleepers and soft sleepers. Traveling on a hard seat train is the equivalent of traveling 3rd class in a third world country. Hard seats are hard and uncomfortable and the carriages are often crowded with Chinese peasants with large bags and bundles. Soft seats are comfortable seats in less crowded carriages. They are fine for daytime journeys.
Hard sleepers are bunks in open compartments, with six bunks to a compartment, three on each side. The top bunk is about six feet off the ground, which means there is a lot of space between the bunks. Hard sleepers usually cost twice as much as hard seats. Hard sleeper carriages are often crowded, smokey, noisy and uncomfortable.
Soft sleepers are closed bunk compartments for four people. The beds are generally reasonably comfortable and each bunk has a reading light and clean sheets. Try to get a lower bunk, which is more comfortable to sit in when you are not sleeping. Soft sleepers generally cost twice as much as hard sleepers. The compartments are shared by strangers or both sexes.
Because soft sleepers are considerably more expensive than other classes it is usually not very difficult to get a seat. Some have air conditioning, some don't. The toilets are generally pretty clean and hot water is served for tea. The main drawback is that a lot of people smoke.
Scalpers, Trains and Chinese New Year
China’s 5,700 train stations are the home of “yellow bulls”’scalpers who buy tickets at list price and then resell them at a higher price. They are particularly active during the Chinese New Year, when hundreds of millions of tickets are sold and seats are in short supply and the scalpers can demand high prices. Top scalpers can earn up to $360 a day, a healthy chunk of money in China.
Over the Chinese New Year holiday a scalper can sell $50 tickets for around $100. They say they have no problem finding customers. The only thing that limits their profits is an inability to get enough tickets to meet demand. By one estimate 10,000 yellow bulls operate at the two main trains stations in Beijing alone. Many are pregnant women, who according to Chinese law, are exempt from arrest or fines.
See Chinese New Year, Holidays, People and Life
Spring Festival travel mess
New Railroad Lines in China
In the late 1990s and early 2000s, there was drive to build railroads in remote parts of China to unite the country, help the poor, help poorer regions of the country, and help the government exert stronger control and better exploit resources. The government had plans to lay 13,600 kilometers of track nationwide between 2000 and 2005 at a cost of $45 billion. The construction was aimed particularly at narrowing the economic gap between the rich coastal areas and the poorer interior of country by making it easier to move goods to and from the interior. It was also aimed at clearing bottlenecks that hindered economic growth.
Rail construction has forged ahead an astonishing rate; 2,500 miles of new track a year, the Communications Ministry says, along with upgrades on existing rail lines to improve trains’ speed and carrying capacity. China is building high speed railroads and expanding freight lines and hooking up railways to its equally ambition subway building programs. In October 2008, the Chinese government approved $100 billion for trains as part of its stimulosus program to get the Chinese economy going.
See Tibet, Kashgar
New train in Tibet
China needs new railroads to maintain its economic growth. As of 2005, railways met only 35 percent of the demand for commodities such as coal and industrial goods. At that time there were plans to build seven new passenger lines, 25,000 kilometers of new track at a cost of $250 billion before 2020. China is hoping that foreign investors will foot some of the bill.
The new 1,575 mile railway between Beijing and Hong Kong, completed in 1997, cost $4.8 billion and employed more than 210,000 workers to build. It was the most ambitious infrastructure project in China after the Three Gorges Dam.
China is building new tracks and linking them with old track to complete a 1,400 railway route between Russia and the Chinese port of Dalian that parallels the North Korean border The rail line will provide access from the Trans Siberian to the ice-free seas off China, by bypass North Korea and provide North Korea with important links to the outside world. The Yunnan provincial government is spending $6.4 billion to develop a railroad network that will connect China with Thailand, Vietnam and Myanmar that is expected to be operational in 2010. China has offered to pay $4 billion to finance a railway between Kunming and Bangkok..
China is planning three transnational routes and is negotiating with 17 countries to set up trans-continental routes to Singapore, Germany and London. One of its primarily aim is to ship freight overland to Asia, the Middle East and Europe and not be so dependent on ship to transport Chinese-made goods. The London route is expected to be up and going by 2025.
High-Speed Trains in China, See Separate Article
China’s Railway Ministry
China railway executive
riding with Russian President
China’s railway ministry employs 2.1 million people and has its own court system, accumulated and retained its powers partly because of a traditional national-defense role, Hu said. The Communist Party has relied on railways to speed troop movements since coming to power, he said.
The ministry uses a bidding process to award contracts for construction projects and buying new trains and equipment, according to the website of its engineering-project tendering unit. Still, it retains control of some parts-makers, said Yuan Gangming, a researcher with the Chinese Academy of Social Sciences.
The ministry has been downsized previously as part of broader reforms, with hundreds of schools and hospitals it once controlled being handed over to local governments. China Railway Group Ltd. (601390) and China Railway Construction Corp., the world’s two biggest listed heavy-construction companies, were also once part of the ministry before being transferred to the state-owned Assets Supervision and Administration Commission. The nation’s two biggest trainmakers, CSR Corp. and China CNR Corp., were also previously under the rail department.
Leadership of the Railway Ministry
China’s railway ministry was led by the former railway minister Liu Zhijun, who was jailed for corruption in February 2011. Under Liu,David Bandurski wrote in the New York Times, a handful of government officials were entrusted with vast resources while being exempted from public scrutiny. China’s railroads were Liu’s private fiefdom, and he was rewarded politically for pushing ahead with big plans through unilateral decision-making, earning the nickname “Great Leap Liu.” [Source:David Bandurski, New York Times July 28, 2011]
Dominating resources of both power and money, Liu monopolized the debate among would-be experts. Dissenting voices, like that of Zhao Jian, a professor at the Economy Management Institute of Beijing Transportation University, were elbowed aside. In an interview published on the eve of the Wenzhou tragedy, Zhao told a magazine in southern China that his university president had discouraged him from criticizing high-speed rail development because it might hinder the school’s ability to secure research grants.
Until the Wenzhou crash in July 2011, Chinese media were almost entirely complicit, trumpeting high-speed rail as a glorious enterprise reflecting the prestige of the Chinese Communist Party. No matter that the cost of tickets placed it out of reach for the vast majority of Chinese.
Liu Bolin, China’s Invisible Man artist
China’s Railway Ministry Debt
China’s railway ministry held debts totaling 2.1 trillion yuan ($326 billion), or about 5 percent of gross domestic product, in 2011. It is China’s largest issuer of corporate debt. Even before the train crash in July 2011 it was finding it harder to raise funds for construction and other projects because of tightening credit and concerns about its borrowings. It was only able to find buyers for 18.7 billion yuan of one-year notes in a 20 billion-yuan sale on July 21. That was likely the first time the ministry had failed to reach a sales target, according to Guotai Junan Securities Co. [Source: Jasmine Wang, Bloomberg, August 4, 2011]
The railway ministry's massive debt liability requires annual interest payments of more than 120 billion yuan ($19 billion). Keith Bradsher wrote in the New York Times , “Financial regulators in Beijing have cautioned banks to monitor their rising exposure from hefty loans to the rail ministry. To pay for rapid deployment of the high-speed system, the ministry has borrowed more than $300 billion. It plans to invest an additional $115 billion this year, despite running losses on existing operations that it attributes mainly to rising diesel fuel costs for older lines, as well as rising interest payments. [Source: Keith Bradsher, New York Times June 22, 2011]
Building China’s Rail Network
Keith Bradsher wrote in the New York Times Work crews of as many as 100,000 people per line have built about half of the 10,000-mile network in just six years, in many cases ahead of schedule “including the Beijing-to-Shanghai line that opened a year early. Before the Wenzhou crash the entire system was on course to be completed by 2020. [Source: Keith Bradsher, New York Times June 22, 2011]
The costs are staggering. The general budget estimate for the Beijing-Shanghai high-speed railroad alone surpasses the entire budget for the Three Gorges Dam Project.
Great Leap Culture in China’s Railway System
Train and traffic going
to the Great Wall In December 2010, David Bandurski wrote in the New York Times, “the party’s flagship People’s Daily newspaper ran a front-page story valorizing an ordinary train driver who had been given a “dead order” from superiors back in 2008 to master a new high-speed train in just 10 days, against the judgment of a German trainer who said trainees needed at least two months. With all the high foolishness of state propaganda, the article relished the fact that the odds were stacked against the trainees and the fact that there was “no room for error.” [Source: David Bandurski, New York Times July 28, 2011]
The “great leap” culture that Liu Zhijun epitomized is the way things operate across China, from county towns bursting with development all the way up to the top. Party and government officials are accountable only to superiors with whom they hope to score expedient political points. The legitimate concerns of citizens are routinely ignored.
Chinese people have pleaded with their leaders to slow down and prioritize the quality of development. “China, please slow your soaring steps forward,” one social media user wrote. “Wait for your people ... wait for your conscience! We don’t want derailed trains, or collapsing bridges, or roads that slide into pits. We don’t want our homes to become death traps. Move more slowly. Let every life have freedom and dignity.”
China’s leaders must recognize that the political culture of expediency and secrecy is the root cause of this and other tragedies, from food and mine safety to violent property demolition. Political reform is needed to empower Chinese citizens to monitor the government and eliminate corruption and mismanagement. Reform is the only way to enable real and sustained accountability.
In the face of mounting public anger, the government is now dealing more seriously with the crisis. Prime Minister Wen Jiabao has visited the crash site, pledging to hold those responsible to account, and the government has ordered an “urgent overhaul” of the national railway system. But this urgency must not, yet again, become mere expediency, another high-speed solution to a crisis of public opinion.
Questions about the rapid development of China’s high-speed rail network have simmered under the surface for years but were never given a proper hearing. "Liu had this great-leap mentality and he wanted to roll out this system much faster than they should have," Damien Ma, China analyst at Washington-based Eurasia Group, told the New York Times. "They did a lot of scrimping." Liu couldn’t be reached for comment. Wang says she hopes the government report on the accident will fix blame and prevent future accidents.
Impact of China’s New Rail Network
Keith Bradsher wrote in the New York Times, “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 a half-century ago made modern, national commerce more feasible in the United States, China’s ambitious rail rollout is helping integrate the economy of this sprawling, populous nation “though on a much faster construction timetable and at significantly higher travel speeds than anything envisioned by the Eisenhower administration. [Source: Keith Bradsher, New York Times June 22, 2011]
For the United States and Europe, the implications go beyond marveling at the pace of Communist-style civil engineering. China’s manufacturing might and global export machine are likely to grow more powerful as 200-mile-an-hour trains link cities and provinces that were previously as much as 24 hours by road or rail from the entrepreneurial seacoast.
Impact of China’s Rail Network on Freight
Keith Bradsher wrote in the New York Times, “The 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 construction of additional freight 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. [Source: Keith Bradsher, New York Times June 22, 2011]
Among the biggest beneficiaries of the high-speed rail system are firms that contribute nothing to defray its costs. Those would be freight shippers, which now have more exclusive use of the older rail lines, with fewer delays. On the older tracks, the rail ministry has long been able to dictate that freight rates would subsidize passenger trains because the ministry owns those older tracks outright. The new, high-speed lines “passenger trains only “are owned by joint ventures between the rail ministry and provincial governments. That has prevented the ministry from forcing freight shippers to cross-subsidize the new high-speed services. As a result, passengers must pay much higher fares on the new trains than on the older ones. The lack of freight subsidies is also causing concern in the rail and banking industries that the debt agreements of some joint ventures might need to be revised to extend the repayment of investment costs over more years.
Impact of China’s Rail Network on the Chinese Economy
Zhen Qinan, a founder of the stock exchange in coastal Shenzhen and the recently retired chief executive of ZK Energy, a wind turbine producer in Changsha, told the New York Times that high-speed trains were making it more convenient to base businesses here in Hunan Province. Populous Hunan has long provided labor to the factories of the east, but its mountains have tended to isolate it from the economic mainstream. Mr. Zhen ticked off Hunan’s attributes: “Land is much cheaper. Electricity is cheaper. Labor is cheaper.” [Source: Keith Bradsher, New York Times June 22, 2011]
Around China, Bradsher wrote “real estate prices and investment have surged in the more than 200 inland cities that have already been connected by high-speed rail in the last three years. Businesses are flocking to these cities, now just a few hours by bullet train from China’s busiest and most international metropolises.
“The he 820-mile Beijing-to-Shanghai line will create a business corridor between China’s two most dynamic cities and form a north-to-south artery with links to east-to-west rail lines at two dozen stations along the way. “It’s the network together that makes it work “knowing you can go from Shijiazhuang to Beijing and then transfer to Tianjin, so the coal guys can go to the port and conduct business with their shippers, for example,” said John Scales, a rail expert in the Beijing office of the World Bank who has advised China. “
Problems with the Rapid Growth of China’s Train System
China has one of the highest-density rail systems in the world, according to Michael Komesaroff of Urandaline Investments in Australia. He told Bloomberg "The Chinese are running at least two times the level of anyone else in the world. That means signaling and systems management become more critical.” [Source: Jasmine Wang, Bloomberg, August 4, 2011]
"I think since 2008 China has experienced what we call a 'great leap forward' of railway construction," said Ren Xianfang, a senior analyst at IHS Global in Beijing. "We've long had suspicions that this speed of construction is unsustainable."
The main problem, Ren said, are that the systems in place imply "there are lots of systemic fault lines with China's management of the high-speed train network" that has resulted in under-investment in the software infrastructure. "So even though we have very rapid build-out of physical infrastructure, the software management has not kept up.
Chinese Railway Minister and His Deputy Steal Millions
The huge spending connected with the rail expansion also has been blamed for corruption. In March, the National Audit Office said it had identified 5 billion yuan of financial irregularities in the Beijing-Shanghai link alone.
Railways Minister Liu Zhijun was dismissed in the spring of 2011 amid an investigation into unspecified corruption allegations. No details have been released about the allegations against him, but news reports say they include kickbacks, bribes, illegal contracts and sexual liaisons. After Liu's sacking, allegations quickly emerged that he had taken a 2.5 per cent cut on high-speed projects.
In February 2011 there were reports that railway minister Liu Zhijun accepted $122 million in kickbacks. Zhang Shuguang, deputy general engineer of the Ministry of Railway and director of its Transportation Department, was suspended on corruption charges . China's state auditor revealed that corruption derived from the Beijing-Shanghai line amounted to $17 million. Many believe that this figure wildly understates the problem.
Wu Zhong wrote in the Asia Times, “Zhang, 56, an associate of Liu, was regarded as the “father of China's high-speed railways.” Details of the case are shocking the public. Zhang reportedly has US$2.8 billion stashed away in Swiss and US bank accounts, wealth rivaling that of a small country. This despite his status as a prefecture-level official, with a monthly salary of just 8,000 yuan (US$1,220). In terms of the money involved, Liu's case pales into insignificance in comparison with his protege - Chinese media estimate that Liu took up to 2.1 billion yuan in bribes. "The protege has outdone his master," as another Chinese proverb has it. [Source: Wu Zhong, Asia Times, March 8, 2011]
“In a typical case of a "naked official", Zhang had already moved his wife, child and presumably a large portion of his ill-gotten gains to the United States some time ago. The term "naked official", coined by Chinese netizens, describes an official who gradually shifts his family and wealth overseas so he can flee the country at any time...So how did Zhang - such a blatant "naked official" - remain in such a key post? How could he transfer such money out of the country without being discovered? How corrupt is the high-speed railway project, if Zhang took such a big bite off the cake? And rampant corruption is involved, has it affected the quality of high-speed railway projects? [Ibid]
“It is obvious that Zhang acted so recklessly because he had a "protective umbrella" - Liu Zhijun. Liu could have protected Zhang because he had virtually absolute, unchecked power in China's railway sector.When asked to comment on Liu's case, Premier Wen Jiabao said in an online chat with netizens on February 27 that it showed Beijing's determination to crack down on official corruption. However, he admitted that the abuse of power by the highest-ranking leader of a region or institution was possible because "our government and major officials have too much power. Power is too centralized without restriction." [Ibid]
China to Cut Railway Investment in 2012
In December 2011, Reuters reported: China's railway ministry plans to cut its annual railway investment by 15 percent in 2012 to 400 billion yuan ($63.10 billion), Xinhua said. The moderate scale-back in spending comes after a deadly crash between two Chinese high-speed trains earlier this year that sparked public fury and forced Beijing to slow the country's rapid railway expansion. [Source: Aileen Wang, Reuters, December 23, 2011]
Slower investment could reduce financial strains on the heavily-indebted Railway Ministry, China's largest bond issuer after the treasury and with outstanding debt of 2.23 trillion yuan ($351.8 billion) as of the end of September.Railway infrastructure investment directly accounted for only about 3 percent of China's overall capital spending in 2010.
To support the cash-strapped sector, Beijing has cut taxes for buyers of the Railway Ministry's bonds between 2011 and 2013. Xinhua said the Railway Ministry would start construction of 6,366 kilometers of new train lines in 2012. Since the train accident in July which killed at least 40 people, construction of new high-speed trains in China has ground to a near halt.
A failure to expand rail capacity could choke economic growth because exporters away from China's coast rely on rail to get goods to ports. The rail ministry's reported debt is 2 trillion yuan ($300 billion). Analysts say its revenues are insufficient to repay that. That has prompted concern the ministry might need to be bailed out by Chinese taxpayers.
Image Sources: 1) Nolls China website http://www.paulnoll.com/China/index.html ; 2) Tales of Shanghai website; 3) Tibet Train com; 4) Stean train poster: Landsberger Posters http://www.iisg.nl/~landsberger/ ; 5, 8) Seat 61 com; 6) Louis Perrochon http://www.perrochon.com/photo/china/ ; 7) China Trends; 9, 10) Xinhua; 11, 12) Gluckman com ; Liu Bolin, China’s Invisible Man artist, Global Times Chinese: photo.huanqiu.com http://photo.huanqiu.com/creativity/unlimited/2010-11/1254288.html
Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.
© 2008 Jeffrey Hays
Last updated April 2012