[M II A II R II K]

The Backlash Is Brewing Against Chinese High-Speed Rail: Here's Why It's In Trouble


Jan. 14, 2011

By Patrick Chovanec



Read More: http://www.businessinsider.com/china...#ixzz1BFyy1djE

Currently, China’s conventional rail system is stretched to capacity carrying two commodities: coal and people. And as Damien Ma, an analyst at the Eurasia Group, notes in a post today at The Atlantic, passengers takes politically priority over coal, requiring much of the nation’s coal to be transported by truck, leading to monumental traffic jams on China’s roads (including the famous 10-day, 62-mile backup outside of Beijing last August, which attracted worldwide attention and mainly consisted of coal trucks).

The theory is that building a national high-speed rail network will put all that passenger traffic on “the fast track,” as it were, and open up capacity on the existing rail network to move not only more coal but also other types of goods, thus relieving the road backups and boosting both productivity and regional development.

The problem is that high-speed rail is expensive both to build and to operate, requiring high ticket prices to break even. The bulk of the long-distance passenger traffic, especially during the peak holiday periods, is migrant workers for whom the opportunity cost of time is relatively low. Even if they could afford a high-speed train ticket — which is doubtful given their limited incomes — they would probably prefer to conserve their cash and take a slower, cheaper train. If that proves true, the new high-speed lines will only incur losses while providing little or no relief to the existing transportation network.

Unfortunately, that seems to be precisely the situation that’s shaping up this Chinese New Year (the year’s peak travel season), according to an article in this Wednesday’s China Daily. The article reports that some 5,149km of high-speed track were put into service last year, making the network stretch to 8,358km, the world’s longest … But the opening of more fast train services has led to fewer regular trains being available for budget-conscious passengers.

China Daily notes that a new luxury sleeper service between Shanghai and Chengdu costs an astonishing US$352 (easily comparable — and possibly more expensive than — an air ticket). But many travelers cannot afford the tickets, causing a waste of transport capacity.

.....