The National Development and Reform Commission (NDRC) has unveiled new plans to intensify railroad transportation construction, particularly in Western China.
China owns now the largest high-speed rail network in the world. This network is widely used by citizens especially these days, for New Year holidays.
But one can question the financing of such infrastructures. It has been noted that very few high speed rail lines in the world have proved to be profitable. The popular Beijing-Shanghai line has only turned profitable in 20141. But maintenance costs are still very high and can only rise as China labor costs is increasing.
During my studies, I examined the case of high speed railroad in Hainan. This province has the denser network of high speed railroads in China. I found out that this programme was very expensive for the provincial government and so the local government has increased its economic dependency toward the central authorities. They have also relied on intense real estate constructions along the network to finance these infrastructures and this has led to real estate speculation issues.
Although we cannot deny the social benefits of high speed train network, China has to make sure that these unprofitable lines would not become an economic burden.
- Lyu Chang (2015). ‘Beijing-Shanghai high-speed line turns profitable in 2014’. China daily, January 27. Retrieved February 22, 2015 from http://www.chinadaily.com.cn/business/2015-01/27/content_19414353.htm