High Speed Rail in china

High-speed rail in China refers to any railway in China with commercial train service at the speed of 200 km/h (124 mph) or higher as internationally recognized. China has the world’s longest HSR network with over 19,000 km (12,000 mi) of track in service as of January 2016, which is more than the rest of the world’s high-speed rail tracks combined, and a network length of 30,000 km (19,000 mi) is planned for 2020.

The nationwide high-speed rail (HSR) network, which extends to 28 of the country’s 33 provinces and regions, consists mainly of conventional track railways including upgraded mixed passenger and freight lines, newly built passenger designated lines (PDLs) and intercity lines. Notable lines include the world’s longest line, the 2,298 km (1,428 mi) Beijing–Guangzhou High-Speed Railway and the Shanghai Maglev, the world’s first high-speed commercial magnetic levitation (maglev) line. Nearly all high-speed rail lines and rolling stock are owned and operated by the China Railway Corporation, the state enterprise formerly known as the Railway Ministry.

Why is high-speed rail growing so fast in China?

China spent just 30 years to become the second richest country in the world. The change does not only reflect in the rapid economic development, but also influence people living in China. The rapid economic development brings high-speed pace of life, and the need for faster transportation. With “Green Train” eliminated by K Express, K Express eliminated by EMU (DongChe), now China is embracing the era of high speed rail. Chinese people enjoy the fruits of faster railways and require the trains to run faster as well.

China’s Ministry of Finance released that the national fiscal revenue in 2010 reached 8.3 trillion yuan, an increase of 1.5 trillion yuan more than last year’s. China became the world’s second richest government. In the past few years, china hosted the Olympic Games, World Expo, Asian Games and many other world-class event. All were costly. Especially, 300 billion was spent on Beijing Olympic Games. The success of the Olympic Games proved the Chinese government’s strong financial ability. This also meant that the Chinese government could invest vast of money in other areas such as building high speed rail. A lot of people believed that Chinese government had such strength.

Meanwhile, the economic crisis in 2008 provided an opportunity for the Chinese Bureau of Rail to apply fund from the central government. After the 2008 economic crisis, the Chinese government put forward a 4 trillion bailout plan to save the national economy. The central government recognized the blueprint of high speed rail and supported 1.5 trillion extra fund to build high speed rail.Therefore, from the beginning of 2009, annual railway investment exceeded 700 billion yuan which was even higher than the military budget.

From importer to exporter

Over the last few years it has become increasingly clear that China’s HSR ambitions extend far beyond its borders. Low cost and high-tech are China’s strong pitch.

Currently, China’s high-speed rail service costs significantly less than similar systems in developed countries, but is considerably more expensive than conventional rail service. For the 419 km (260 mi) trip from Beijing to Jinan, HSR costs CNY185 (US$30) and takes 1 hour 32 minutes, while a conventional train costs CNY73 (US$12) and takes about 6 hours.By comparison, the Acela train from Washington DC to New York City covering a slightly shorter distance of 230 mi (370 km) costs US$152–180 (Y930) and takes 2 hour 50 minutes.

In terms of technology, China reached this leading position using a strategy that has served the country well in a host of industries – technology transfer and reverse-engineering. Early players in the Chinese HSR market  were required to form joint ventures or partnerships with Chinese manufacturers and transfer key pieces of technology for the construction of high-speed rolling stock.

Promising international prospects

Countries in which China has signed or is negotiating HSR contracts include Saudi Arabia, Hungary, Serbia, India, as well as Turkey. Even in United States, Chinese firms want to build, finance California high-speed train.

It has been 150 years since the British started to build the first railway in China, the earliest of which were dismantled by a suspicious Qing dynasty government. Today, history has come full circle and it is the UK that is seeking Chinese help for its next wave of high-speed rail. China is a very competitive party to provide the infrastructure for UK’s railway network.

After over fifteen years of learning with extreme  diligence, China is bringing its hard work to the outside word. Though China might have some difficulty to penetrate in Europe, there are plenty of developing economies that are proving increasingly keen to secure the fruit of China’s HSR labour at a lower cost than its rivals can achieve.

Xuefeng Li
Tulane MBA Candidate, 2016