A look at Chinas high-speed rail investments

This is a 2010 piece that seems timely today given Obama’s efforts to jump-start high speed rail in America and the response by many conservative governors to block that effort (see “Passenger rail is not in Ohio’s future”: New GOP governors kill $1.2 Billion in high-speed rail jobs).

Guest bloggers Julian L. Wong and Nick Wellkamp walk us through China’s aggressive investments in high speed rail.

President Dwight D. Eisenhower put a down payment on the U.S. economy in 1956 by signing the National Interstate and Defense Highways Act. This wise investment in a modern, transformative transportation infrastructure””in the form of 41,000 miles of interstate highways””enabled the rapid movement of people and goods across the nation and was vital to our astounding economic progress for the next 50 years.

Today, it is China that is leading the world in a key next-generation transportation technology: high-speed rail. China has already built 4,000 miles of rail featuring trains with average speeds of 120 miles per hour or greater, and the country plans to build an additional 10,000 miles of high-speed rail connecting all of China’s major cities by 2020.

CAP experts experienced the high-speed rail firsthand during our recent [2010] fact-finding mission to China. We took the train from Beijing to Tianjin, reaching a top speed of 205 mph and covering the 73-mile journey””roughly the distance between New York and Philadelphia””in less than 30 minutes. Stepping off the rail platform, it was hard not to get the feeling that China is racing ahead in investing in mass public transit infrastructure while the United States is lagging behind in the race to develop clean energy industries.

China’s $300 billion investment in high-speed rail

train operator's cockpit

China already boasts a rail network that, including both standard and high-speed rail, is more than 53,000 miles long. And China plans for that network to reach 68,000 in 2012 and 75,000 by 2020. All of China’s provincial capitals have been connected by rail since the 1960s, and unlike the United States, rail is already a major mode of intercity passenger transportation.

The country began planning its nationwide network of high-speed rail in the early 1990s. And China began implementing a series of six “speed-up” campaigns in the late 1990s to modernize its existing rail infrastructure by increasing the speed and capacity of its lines. It also plans to build new passenger-dedicated high-speed rail lines. Indeed, the centerpiece of China’s Medium- to Long-Term Railway Network Plan is a new national high-speed rail grid overlaid onto the existing rail network. The new grid would consist of four north-to-south corridors, four east-to-west corridors, and two additional intercity lines, all totaling some 7,500 miles when completed in 2020.

China will spend an estimated $300 billion to meet its 2020 goal for high-speed rail. Nearly 40 percent of China’s $586 billion economic stimulus package announced in 2008 was allocated to infrastructure projects, and a large portion was dedicated to high-speed rail, pushing forward many projects that were otherwise further down the project pipeline. Planners are now beginning to look for new sources of capital. The Beijing-to-Shanghai route that will open next year, for example, is owned and managed by a consortium that includes the Ministry of Railways, China’s national social security fund council, and an investment arm of one of China’s largest privately owned insurance companies. And there is some speculation that this consortium will seek capital market investors through a multibillion-dollar initial public offering in the near future.

Why it makes sense for China to invest in high-speed rail

Some have questioned the economics of high-speed rail. A common criticism is that the construction of rail infrastructure is very expensive and its operations may never be profitable. The Beijing-Tianjin line, for instance, is reportedly losing some $102 million per year. Another criticism is that high-speed rail tends to benefit the wealthier population more than the lower-income class because tickets for high-speed rail are more expensive than those for conventional rail or bus transportation.

But there are at least three compelling reasons to justify this heavy investment:

1. Increasing demands for human mobility

China is experiencing the biggest wave of migration in human history, with an estimated 300 million people relocating from rural to urban areas over the next two decades as part of an urbanization-led economic growth strategy. The country is facing a long-term challenge of meeting a sustained and unparalleled demand for all modes of transportation services, and high-speed rail figures prominently as part of the solution.

attendant scrubs train

China’s floating population””rural citizens who have migrated temporarily to urban centers in search of work or educational opportunities””already accounts for more than 10 percent of its population of 1.3 billion. And there is a mad crush among these migrants every spring festival to hop on existing bus and rail lines to return to their home villages to be with their families for the most important Chinese cultural festival of the year. Migrant workers may not be able to afford high-speed rail fares at present, but expanded passenger rail capacity will eventually lead to more affordable prices over time.

2. Promoting economic development

A major reason for the push to build passenger-dedicated lines is to free up existing lines for freight capacity, which is sorely needed and has been unable to keep pace with the logistical demands of China’s growing national economy since the early 1990s. Additional freight capacity will not only facilitate domestic commerce, but also yield additional revenue that can offset the high costs of high-speed rail construction.

Increased connectivity between provincial capitals will enhance commercial interactions and stimulate the economy. An 800-mile line from Beijing to Shanghai””roughly the distance between Chicago and New York””will open next year, cutting what used to be a 10-hour journey by conventional rail down to four hours. The high-speed rail network will also reach out to cities in less developed western parts of China, stimulating economic activity there and helping to spread the wealth of China’s economy.

High-speed rail infrastructure also increases demand for commodities and creates hundreds of thousands of jobs in the construction, steel, cement, engineering, and manufacturing sectors. Construction of the Beijing-Shanghai line alone created employment for 100,000 workers and engineers.

The benefits of high-speed rail are not limited to China’s domestic market. China is poised to reap the economic benefits from being an exporter of knowledge, technology, and capital for high-speed rail projects worldwide. Chinese companies are already building high-speed rail lines in Turkey and Venezuela, and are in discussions with Brazil, Russia, Saudi Arabia, and Poland to build projects there. And the Chinese have most recently signed cooperation agreements with the state of California and General Electric to explore the feasibility of building, financing, and licensing technology to build high-speed rail lines in California.

3. Promoting energy security and sustainability

China’s thirst for oil is growing, in no small part due to its expanding auto and aviation sectors. Half of its oil comes from foreign sources. And use of electric trains offsets the use of oil-based transportation such as automobiles and planes. Fares for high-speed rail are more expensive than conventional rail or bus, but they are half the price of fares for flights and take only slightly longer to travel. The 314-mile Zhengzhou-Xi’An high-speed rail line is already forcing some airlines to suspend their flights, while the Beijing-Tianjin line that we took has led to an 18 percent decline in bus trips. The additional freight capacity that results from passenger rail expansion can also replace more carbon-intensive modes of heavy-duty trucking.

Electrification often requires coal in China, but electric locomotives are much more efficient than oil-based locomotives and also provide the opportunity to utilize cleaner (and growing) sources of power from wind, solar, and biomass. As a result, increased use of high-speed rail over automobiles and planes will reduce dependence on foreign oil, cut local air pollution and carbon emissions, and help China achieve its goal of a low-carbon economy.

The land use issues involved in rail compared to highways are also noticeably lower, achieved largely by building the high-speed rail lines on new viaducts, bridges, and tunnels.

Land-use issues in high-speed rail

Rail infrastructure that relies on large numbers of viaducts, tunnels, and bridges raises overall construction costs, but China has been able to manage its costs in other ways. “The costs of Chinese high-speed rail lines are the lowest in the world because such a massive build-out creates an economy of scale, labor and basic material costs are relatively low, and China generally finishes building lines on time, and therefore avoids costly delays,” observes Will Freeman, a research analyst at Dragonomics, a Beijing-based industry research and advisory firm.

Beijing South Railway Station

Perhaps most significantly, state-owned banks’ ability to provide multibillion-dollar loans at low interest rates accounts for China’s ability to scale up its infrastructure investments in a way no other country can. According to Freeman’s estimates, the costs of building high-speed rail are up to three times higher than conventional rail in Europe or Japan, but they are only one and a half times higher than conventional rail in China.

Of course, building infrastructure projects quickly can create unintended consequences. Construction of the Guangzhou-to-Wuhan express line, for example, along with an overextraction of groundwater, caused nearby land to sink, damaging 1,000 residents’ properties. And the use of viaducts, tunnels, and bridges may mitigate local land-use changes, but it increases the system’s lifecycle carbon footprint due to the increased use of materials (particularly concrete and steel) and energy. The carbon footprint of high-speed rail compared to other transportation modes also depends highly on ridership, providing another important reason, besides profitability, for employing competent operational management.

China’s philosophy: Import, digest, reinvent

The bigger picture of innovation and competitiveness shows that high-speed rail is yet another technological sector that demonstrates the classic Chinese industrial innovation model of “import-digestion-reinnovation” at work. China’s train technology is state of the art, but originally derived from French, German, and Japanese technology, and tweaked to adapt to domestic geographic conditions””although some have complained of unfair copying of foreign technology by the Chinese. As a result, Chinese rail companies now reportedly have 940 registered patents. In just over a decade since its first “speed-up” campaign, China is now ready to move from being an importer of high-speed rail technology and operational know-how to being an exporter.

The commitment to create the largest market and export base for high-speed rail is also attracting world-class research and development capabilities. IBM announced last summer the opening of its Global Rail Innovation Center in Beijing, where it will work with industry and universities to develop software solutions for high-speed rail operations.

What does this mean for the United States?

The U.S. federal government for most of the past decade has underinvested in its national passenger rail network while continuing to generously fund the interstate highway system and aviation industry, perpetuating high-carbon modes of transportation. There is only one high-speed rail line in the United States””the Acela Express that runs from Boston to Washington, D.C., covering 456 miles in seven hours. The recently opened Wuhan-to-Guangzhou line in China, by contrast, covers 600 miles in three hours.

Differences in political-economic structures and labor and resource costs between China and the United States may make it impossible for the United States to replicate the pace and scale of China’s infrastructure investments, but it is important for the United States to pursue its own strategy to upgrade its transportation infrastructure.

Fortunately, the current administration has laid down a sweeping vision that identifies 10 high-speed rail corridors“”each between 100 to 600 miles in length””across the United States. But actual federal funding for this vision is a little more than $10 billion so far””a fraction of what China is spending, and certainly insufficient to cover the costs of all 10 projects.

The federal funding is designed to serve as a catalyst for nonfederal sources of funding. But making that vision a reality will require state governments and the private sector to recognize the economic, social, and environmental benefits of high-speed rail and make greater financial commitments. If the vision is not heeded, we will miss the opportunity to lay an important piece of what will be the foundation for a more sustainable and competitive economy.

— Julian L. Wong (then of CAP, now at DOE) and Nick Wellkamp

JR:  The other reason to invest in high-speed rail is that airlines are the first industry to be wiped out by peak oil.


12 Responses to A look at Chinas high-speed rail investments

  1. Peter M says:

    If this is what our high speed train resembles in Connecticut- it should provide the region with a significant economic boost.

    The ‘learning Corridor’ rail line from New Haven, north to Hartford and Springfield has the full support of new Governor Dannel Malloy.

    Taking a different view of high speed rail, then republican Governors, Governor Malloy said in a statement, “everyone knows that effective transportation is crucial to keeping the economy moving. The better the transportation infrastructure, the better positioned the economy will be to recover, prosper, and create new jobs, and that’s why it is so critical for us to capitalize on the opportunity before us. This money is now up for grabs, and we’re not going to waste a second. We know our project is a strong contender, and we’re going to do our best to get additional funds from our federal partners.”

    With Florida abandoning its high-speed rail plans, Connecticut is looking to Transportation Secretary Ray LaHood for $100 million of the money set aside for that project.

    Gov. Dannel P. Malloy and the state’s congressional delegation want the Obama administration to divert that money to help build the New Haven-to-Springfield high-speed train line.

    They’re emphasizing that the partisan atmosphere that scuttled Florida’s project this week isn’t a risk in Connecticut. Malloy’s request on Friday was endorsed by the state’s two top Republicans, House Leader Lawrence Cafero and Senate Minority Leader John McKinney.

  2. jyyh says:

    four lines crossing the country would in here (Finland) too have the additional benefit of making rerouting easier in case disruption of service, but I’ve heard of no such plans.

  3. Monrdhil says:

    There are two important elements in the deployment of such transportation system: the infrastructure, which needs inter-states coordination, and trains, which could first be bought.

    But the opposition to buy non-national technology may stop any initiative in this domain.

  4. Dr.A.Jagadeesh says:

    China is leader in High Speed Trains. In this age of pollution from automobiles, trains are the best mode of travel both in cost and time. In a vast country like China, trains are a major mode of transport.

    In India too there is growing interest to speed up the trains (Of course limited in speed for various reasons).

    Here is the history of High speed Trains in China:
    High-speed rail in China refers to any commercial train service in the People’s Republic of China with an average speed of 200 km/h (120 mph) or higher. By that measure, China already has the world’s longest high-speed rail (HSR) network with about 8,358 km (5,193 mi) of routes in service as of January 2011 including 1,995 km (1,240 mi) of rail lines with top speeds of 350 km/h (220 mph).
    China’s high speed rail lines consists of upgraded conventional rail lines, newly-built high-speed passenger designated lines (PDLs), and the world’s first high-speed commercial magnetic levitation (maglev) line. The country is undergoing an HSR building boom. With generous funding from the Chinese government’s economic stimulus program, 17,000 km (11,000 mi) of high-speed lines are now under construction. The entire HSR network will reach 13,073 km (8,123 mi) by the end of 2011and 25,000 km (16,000 mi) by the end of 2015.
    China is the first and only country to have commercial train service on conventional rail lines that can reach 350 km/h (217 mph). Notable examples of HSR in China include:
    • The Wuhan–Guangzhou High-Speed Railway, a passenger-dedicated trunk line opened in 2009, that reduced the 968 km (601 mi) journey between the largest cities in central and southern China to 3 hours. Trains reach top speeds of 350 km/h (220 mph) and average 310 km/h (190 mph) for the entire trip.
    • The Beijing-Tianjin Intercity Railway, an intercity express line opened in 2008, that shortened the 117 km (73 mi) commute between the two largest cities in North China to 30 minutes. Trains reach top speeds of 330 km/h (210 mph) and average 234 km/h (145 mph).
    • The Shanghai Maglev Train, an airport rail link service opened in 2004, that travels 30 km (18 mi.) in 7 minutes and 20 seconds, averaging 240 km (150 mph) and reaching top speed of 431 km/h (268 mph).
    Policy justifications
    Critics both in China and abroad have questioned the necessity of having an expensive high-speed rail system in a largely developing country, where most workers cannot afford to pay a premium for faster travel. The government has justified the expensive undertaking as promoting a number of policy objectives. HSR provides fast, reliable and comfortable means of transporting large numbers of travelers in a densely populated country over long distances, which:
    • Improves economic productivity and competitiveness over the long term by increasing the transport capacity of railways and linking labor markets. Moving passengers to high speed lines frees up older railways to carry more freight, which is more profitable for railways than passengers, whose fares are subsidized.
    • Stimulates the economy in the short term as HSR construction creates jobs and drives up demand for construction, steel and cement industries during the economic downturn. Work on the Beijing-Shanghai PDL mobilized 110,000 workers.[34][38][39]
    • Promotes the growth of urban centers and limits sprawl. High-speed rail links city centers, which are building subways. These measures alleviate traffic congestion.
    • Supports energy independence and environmental sustainability. Electric trains use less energy to transport people and goods on a per unit basis and can draw power from more diverse sources of energy including renewables than automobile and aircraft, which are more reliant on imported petroleum.”

    The table belows lists the upgraded conventional railways that run 10 or more CRH high speed trains per day.
    Route Railway distance Trains per day
    (aggregation of both direction) Trains in service
    Guangzhou-Shenzhen Guangshen line 147 km
    220 CRH1A
    Ningbo-Hangzhou Hangning line 149 km 50 CRH1A/B/E CRH2A/B/E
    Beijing-Shijiazhuang Jingguang line 277 km 46 CRH2A CRH5A
    Beijing-Shenyang Jingha line 703 km 24 CRH5A
    Beijing-Jinan Jinghu line 495 km 22 CRH2A CRH5A
    Chongqing-Chengdu Chengyu line & Dacheng line 315 km 22 CRH1A
    Beijing-Shanghai Jinghu line 1454 km 18 CRH1E CRH2E
    Wuhan-Nanchang Wujiu line & Changjiu PDL 337 km 16 CRH2A
    Shijiazhuang-Zhengzhou Jingguang line 412 km[ 14 CRH2A
    (Source: Wikipedia).

    Dr.A.Jagadeesh Nellore (AP), India

  5. Douglas says:

    I’m a supporter of high speed rail, and would love to see more of it in the US. However, re China, there are some concerns they have tried to do too much too fast:

  6. Ziyu says:

    The only reason conservatives can say that investments in HSR and highways is too expensive is that the US has been underinvesting in infrastructure for too long. Ever since Reagan, the government is bad, just lower taxes menatality has caused politicians too kick the can down the road for infrastructure to avoid looking like a big government supporter. However, just like the doc fix, the cost just keeps growing and you have to pay it someday. Let’s hope that someday is within Obama’s first term.

  7. dbmetzger says:

    From the chinese news service…
    Fast Tracks Boost Chinese Tourism
    China is speeding towards the goal of becoming the world’s top travel destination. And the country’s booming high-speed railway industry has become a driving engine of its tourism sector.

  8. Mulga Mumblebrain says:

    Once again the openly one-party system that promotes technocrats along meritocratic lines, is beating the pretend two-party, actually one-party system, that promotes the employees of the money power, hands down. It looks even grimmer for the US when one party has been captured by pre-Enlightenment maniacs who believe that dinosaurs floated in the Ark along with Noah, and that anthropogenic climate disruption is a vast Communist conspiracy. The Chinese had enough mad ideological excess for a century, at least, during the Great Proletarian Cultural Revolution, but you have yet to see the worst of The Great Plutocratic Obscurantist Reaction I fear.

  9. Robert In New Orleans says:

    A big problem (and costly one) with high speed trains is the need for dedicated high speed tracks. Existing tracks in the USA are woefully under qualified for any sort speed that these trains are capable of. Another major problem especially in Louisiana are all of the train and vehicle collisions at rural train crossings. Too many of the country people do not bother or think about proper look out procedures before crossing the tracks. This problem can be alevated by fencing off or elevating the tracks, but of course this will add to the cost.

  10. bruced says:

    Robert @9 – having just visited China and traveled widely on trains, the dedicated, elevated line seems to be what the Chinese are doing. Columns to support the tracks were going up everywhere. Of course the big advance the Chinese need to make to to get the train ticket booking system out of the Qin dynasty. Then their system will be amazing.

  11. dhogaza says:

    I’m a supporter of high speed rail, and would love to see more of it in the US. However, re China, there are some concerns they have tried to do too much too fast

    Yes, that’s true. But let’s imagine they have to reduce their 350 km/hr lines by 25% down to 263 km/hr.

    That’s still faster than the 250 km/hr first-generation ICE (German HSR) and AVE (Spanish HSR) technology. While both countries are upgrading, the old 250 km/hr trainsets will be in operation for a long time, you don’t just throw them out every time there’s a boost in speed.

    So the situation in China is still pretty damned good.

    And, remember, the first Transcontinental Railroad’s quality was horrible, especially on the Union Railroad (east to west) part, which crossed largely treeless plains and built with really substandard ties (by the era’s standards), just like some claim might be a problem with China’s HSR lines.

    Most of that original track had to be ripped out and replaced quite rapidly, yet the country was transformed.

    That’s happening in China today, too.

    It wasn’t that long ago that I was reading articles in the newspaper about China’s old-fashioned steam locomotive factories and workshops … and now, look at them.

  12. Eleanor says:

    Just checked. Amtrak is 16 hours from Chicago to New York, more or less the same time the Broadway Ltd. and 20th Century Ltd. took in the 1950s. This is six hours longer than the current (non-high-speed) Beijing to Shanghai train, which travels roughly the same distance, per this article. I just took the high speed train from New York to Washington. It’s not that much faster than the usual trains over the same route, and it did not look cool and high tech, like the Chinese trains.